Gold Selling Surge Amid Skyrocketing Prices
We’re in the midst of what some are calling Gold Rush 2.0. But instead of digging for gold, people are cashing in by selling it. It seems like everywhere you look, folks are turning their old jewelry into cash as gold prices have topped $3,200 per ounce.
People are rummaging through their drawers, visiting pawn shops, jewelers, and smelters to convert their necklaces, watches, bracelets, and earrings into cold, hard cash. “Every day, more customers come in, selling gold and hunting for gems,” shares Sabaschden M. Hernandez, who works at A&M Precious Metals in Los Angeles. “It’s been pretty wild. I’ve been in this business for about eight years, and I’ve never seen anything like this.”
At A&M, customers are getting quite the deal. With gold prices soaring, people are receiving 99% of the market value for their gold, leaving only a small 1% cut for the shop.
So, how does A&M make it work? Some days, Hernandez buys over 400 ounces of gold, which can exceed $1.2 million at current rates.
“A few years ago, we used to have about 7 or 8 appointments daily, but now we’re looking at 15 to 20 customers a day,” Hernandez notes.
A&M acts as a middleman, melting gold into sticks that are then sold to refiners. These refiners prepare the gold to be worked with by jewelers and promptly return it, all happening within just a few blocks in downtown Los Angeles.
Hernandez lifts a jar containing precisely 1 kilogram of gold pellets. “The jewelers grab this here in the Jewelry District to make chains and other items,” he explains. “That recent kilo is sitting around $107,000.”
Behind the scenes, magic happens. Alberto Hernandez, Sabaschden’s uncle, has been refining gold for two decades, with a furnace that reaches up to 6,000 degrees Fahrenheit—though today it’s running at about 2,000, close to gold’s melting point.
The gold is weighed, checked for quality, and then placed into the smelter. With a bit of borax to get rid of impurities, it turns molten in just minutes, before being poured into molds, cooled, and polished up.
“We smelt it and send it to the purifier,” Alberto mentions. “So what we’re really doing is making sure it’s uniformly measured when we check it out now.”
The purity of the gold is assessed: 14 carat gold is about 58.3% pure, while the pristine 24 carat gold is 99.9% pure, which sets the market prices. After confirming the gold’s purity, the customer walks away with cash in hand.
“A lot of customers say they’re waiting for prices to rise, but with rates over $3,000, it seems like a prime time to sell,” Hernandez observes, noting that business fluctuates daily. When prices rise, they see more appointments; when they dip, things slow down. Occasionally, customers bring in heirloom pieces worth more due to their history, not just their weight in gold.
“I often tell them, ‘Are you really sure you want to melt this?’” Hernandez reflects. “It’s antique, and while they want cash right now because gold is popular, sometimes it’s just a hard decision.”
