Current ‘gold rush’ is both exciting and scary
I suppose it is inevitable that I continue to talk about precious metals given the current ‘Gold Rush’ that the world is experiencing. Dealers, jewellers and even pawnbrokers are reporting something of a frenzy of activity as people flock to them to sell off their old gold and silver. For many people it presents a windfall and is a welcome relief, allowing them to pay some outstanding debts.
Back in January I wrote that gold had started out the year at around $1,400 per ounce and I predicted that at before the end of the year “it will suddenly surge forward towards the $1,800 plus range.”
And surge it certainly has: spot price at 9 a.m. as of last Thursday was $1,824, an all-time high (Shame on me, I didn’t buy any!).
Looking at it from the sidelines this ‘Gold Rush’ is both exciting and scary. How will other commodities be affected? Should one sell now before the price drops or is it better to wait in the hope of further increases?
On the other hand what do you do if you are considering a piece of jewelry for a loved one? Will your ‘intended’ settle for a piece of previously enjoyed estate jewelry rather than go for the now, heavily-inflated sparkly ring in the store window?
All great questions to which I am not going to provide an answer!
But aside from cashing in on the current gold frenzy how will the world of antiques and in particular, history, be effected?
Well, if people are ‘scrapping’ their quality gold and silver items simply for the metal content it will inevitably lead to a future shortage of ‘tangible and collectible items’.
By ‘tangible items’ I mean such things as quality early Georgian 18th century silverware, good flatware and wearable jewelry set with gemstones.
Each time a quality piece is melted down there becomes one piece less which will be available for future collectors.
As people get caught up in the quest for cash, today’s melting moments become a physical erosion of our history. Many pieces of antique gold and silver have a relevant and historical connection with the past, wether it be from a personal or national perspective .
Although history can be re-enacted it cannot be relived, neither can quality works by long dead artisans ever be accurately reproduced.
Each unique piece which is melted for its metal is a piece which can never be repeated.
Many items headed for today’s refineries are works of art with an intrinsic value which can never be equated to the mere monetary value that scrap-metal merchants place upon them.
So while it is worth reassessing what you may want to convert to cash I would caution the following: Some of your items may well be worth considerably more than simply the current metal value. Consider having your pieces professionally appraised and also evaluate whether you have appropriate household insurance coverage - a good idea at any time.
Now before any of you write in to complain that they were ‘ripped-off’ by a gold buyer let me reiterate what I have said in previous articles: You will not get anywhere near the ‘spot-price’ for gold or silver unless it is in bullion form, i.e. gold bars or ingots with a purity of .9999 parts per 1,000 and silver with a similar purity.
Gold purity is measured by Karat (such as 10K) or carat (10c). This means that a percentage of gold is mixed with other alloys so when selling you will get an equivalent percentage of the ‘spot-price’.
Added to the equation, the buyer then has to accumulate sufficient quantity of the material to warrant a trip to the refinery.
The buyer then has to pay the refinery to fire-up the furnace and melt down the items.
Once the metal has been refined it goes through the assay process (the assay is the test for purity) and then, and only then, can the ‘buyer’ negotiate a price which they will receive from the refinery or bullion dealer.
A similar palaver applies to the dealer, jeweller or pawnbroker who buys your scrap silver; as silver is also mixed with other alloys.
As a caution: I personally would never sell my stuff to the circus-style itinerant travelling ‘buyers or collectors’ who come to town just for a weekend.
If you do sell, try to find someone local, preferably someone you know, like and trust - someone who at very least is not simply a ‘fly-by-night’ or, as my Mom would say, someone who is “here today and gone tomorrow.”
Tony Duke provides comprehensive appraisal services for Estate Planning, Down-sizing, Probate, Property Division, Insurance, Antique Acquisitions and Sales. See Tony’s website, www.TonyDuke.ca for information on protecting your antiques, collectibles and personal property. Send your appraisal and antique questions to: AntiqueGeek@TonyDuke.ca