Despite Skyrocketing Prices, Locals in No Rush to Sell Gold

Gold prices hit a record high last week, topping out at more than $1,500 an ounce.

Just five years ago, gold sold for a little more than $800 an ounce, and as recently as a year ago it went for slightly more than $1,100 an ounce.

So with budgets tight and people primed for saving, you’d think that they’d be ready to cash in their baubles and broaches when the market’s high. 

Not so much, said Jim Schane, owner of in Darien. Business has been steady at the shop which, in addition to buying and selling coins, purchases silver and gold jewelry from owners ready to trade their precious trinkets for cash.

“Half the people think [gold prices] are going to keep going up,” Schane said. “And half think they’re going to go down.”

What it amounts to is business as usual for Schane, who also buys and sells fossils and minerals. But the trade in jewelry overall has been brisker than usual since the recession began, as more people have been forced to liquidate their assets, Schane said.

Roy Stafford, owner of , said that he's seen a steady of flow clients during the recession who are ready to sell jewelry and old eyeglasses that contain gold parts.

"This has been a particularly erratic and emotional time for people," he said. When people start to lose hope for an economic upswing, that's when they start to sell their possessions, he said.

Compounding that is a greater visibility for “cash for gold”-type operations thanks to advertising campaigns, Schane said.

“People see ads [for stores that buy gold] and think there must be something to it,” Schane said. “They might not even think of selling their jewelry until they see something like that.”

But Stafford cautions people to moderate their expectations when they decide to sell their rings, chains and watches.

"You must understand that you're not selling pure gold," he said. "It could be anything from 10 karat to 14 karat to 18 karat. That's reflected in the price."

So that means even if you have a gold necklace that weighs a full ounce, you won't actually get a return of $1,500. The lower the purity—that is, the karat—the less gold is actually in the item. From there, the broker also takes a cut for serving as the go-between for the client and the refinery that will repurpose the gold.

Stafford advises people looking to sell their gold treasures to shop around, checking at least two or three shops to get the best price before committing to one.

"There are a lot of people taking advantage of the market right now," he said.

And always, always make sure you're paid in cash, he said.

Schane declined to speculate where the gold market will go from here.

“There are 100 reasons why it should go up and 100 reasons it should go down,” he said. “And there are 1 million reasons it should stay the same.”