In the heart of Los Angeles, Alberto Hernandez was busy at his workstation, igniting his equipment until it reached a brilliant orange hue. He then began melting down a collection of jewelry, including rings, earrings, and necklaces, all collectively weighing nearly the same as a bar of soap – just shy of 100 grams or approximately 3.2 troy ounces. Within a short span, the metal had transformed into a bubbling liquid and was poured into a mold the size of a woman’s shoe. An X-ray analysis revealed that the mixture comprised 56.5% gold, giving it a value of $177,000 based on the prevailing gold prices.
In the bustling St. Vincent Jewelry Center in downtown Los Angeles, activity has reached a fever pitch as gold prices hit record highs amid global economic uncertainties. On any given day, a significant amount of gold flows through its doors, and the independent jewelers, gold refiners, and assayers operating within its premises are witnessing an unprecedented influx of customers.
According to Sabashden Hernandez of A&M Precious Metals, there is a notable trend of people, including high-profile figures like rappers, opting to melt down their oversized jewelry pieces. Additionally, new customers are bringing in old family jewelry, some dating back generations, to be melted down. The surge in gold prices is a side effect of policy shifts from President Donald Trump, leading to unpredictable financial market dynamics and inflation concerns.
Across the nation, individuals are turning to their old jewelry for cash, including pawn shop owners and general consumers, who believe gold is a safer investment compared to the fluctuating stock markets. Los Angeles jeweler Olivia Kazanjian has observed patrons bringing in heirlooms, including items engraved with matrimonial dates or originating from the 1800s.
One such transaction involved a client selling a 14-karat gold bracelet adorned with elaborate blue enamel work. Valued for its gold content, the customer received $3,200. Nevertheless, Kazanjian appreciated the artifact’s unique craftsmanship and historical significance, choosing not to melt it down. She makes an effort to enlighten customers on the familial and historical value of such pieces, urging them to reconsider melting them.
On the opposite spectrum, those buying gold bars and related goods are equally busy keeping up with demand. Edwin Feijoo, owner of Stefko Cash for Gold in Pennsylvania, described how quickly gold circulates – entering and leaving the premises in no time. However, not all businesses are booming equally.
For some jewelers importing their products from overseas, tariffs and surging gold prices are eating into profit margins and deterring customer demand. Puzant Berberian from V&P Jewelry notes how additional costs are affecting his business, sharing a recent experience that included a $16,000 tariff on an overseas shipment.
Consumers are also encountering heightened costs, with some items nearly doubling in price compared to the previous year. A chunky 14-karat gold bracelet that might have sold for $600 last year now demands closer to $900.
The general consensus is that these trends will persist. Sam Nguyen of Newport Gold Post Inc. reiterates that many consumers are bullish on gold prices, which, despite a dip from a record high, are expected to rise further, potentially reaching $4,000 to $5,000 per troy ounce by the end of the year.
Jeff Clark of The Gold Advisor echoes this sentiment, anticipating continued price hikes as gold remains a stable asset during periods of economic uncertainty. He draws parallels to the 1970s when gold prices surged amid rampant inflation, suggesting similar dynamics could unfold if financial markets remain volatile.