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Gold boosting business
Prices for precious metal keep stores busy
Web Pawn City
Bobby Coble, general manager for Pawn City, looks at a gold bracelet inside the store on East Vine Street in Statesboro. - photo by JAMES HEALY/staff

      Investors flocked again to gold on Monday, sending it to the latest of a series of records, as fears about recession in the world's major economies infected financial markets.
      Gold continued making gains after Comex floor trading finished, with the most actively traded contract, for December delivery, touching a record $1,901.70 a troy ounce.
      It's been on a tear this summer, rising more than 15 percent in August alone. In the same three weeks, the Standard & Poor's 500-stock index has fallen about 12 percent.
      As the price of gold continues to rise, more and more local residents are selling their gold in an effort to raise money and take advantage of the unprecedented increase in the metal's value.
       "I thought when gold eclipsed $1,000 an ounce that it just wouldn't go any higher," said Bobby Coble, general manager of Pawn City, a major buyer of gold jewelry and scrap gold in the area. "When I came to work here in 1998, gold was about $300 an ounce. This is really unbelievable."
       Last week, gold logged its biggest weekly gain since February 2009, according to FactSet data. The last time gold was worth less than $1,000 an ounce was October 2009. It gained steadily from there, and then burst higher this summer, crossing $1,600 an ounce for the first time in mid-July; three weeks later it was worth more than $1,700 an ounce, and 10 days later, it passed $1,800 an ounce.
       "It used to be that we checked the price every couple of weeks, but now we have to check it daily," Coble said. "But, it is speculative for us, because just as quickly as it has gone up, it can certainly go right back down."
       Big U.S. jewelry chains already raised prices this summer, citing the rising costs of gold and diamonds. The surge in gold is causing "major problems" for jewelry sellers said Jon Nadler, an analyst for Kitco Bullion Dealers. Stores are asking designers to make different kinds of pieces that use less gold, swapping in steel or palladium.
       At this point, analysts say more than fear is driving gold higher. The simple fact that it has kept rising in an otherwise turbulent market is part of the metal's appeal. Nadler said the recent surge "lacks a lot of explanation" and that, to him, signals danger of a deep reversal as it approaches $2,000 an ounce. But analysts have been predicting a top in the market for months only to see gold's climb accelerate.
       "Actually, I think it is a pretty good thing that gold prices have gotten this high," Coble said. "It isn't that we are making more money, because we are having to pay much more for the gold that comes in. It is just that right now, it is very difficult for people to raise money, and to get a loan, and the gold that they don't want or need is an excellent way to do that."
       Coble said there are many ways to sell your gold, but he warned not all of them are good ways to do so.
       "For instance, there are people that will come to town for a day or two and set up shop in a hotel and buy gold," he said. "I am not saying that they are doing anything wrong, but that money leaves our area. I just wouldn't sell my gold to anybody I didn't know. We have been here 20 years, and will be here 20 years from now."
       Coble also advised against sending your gold in the mail to be sold.
       "I know people do it, and I am sure that many are satisfied with their transaction, but I am very wary of putting gold in an envelope and sending it off to be appraised, sold, and then get my money," he said. "It just seems to me that they are too many things that could go wrong in that situation."
       Coble said the sale of gold has brought many new customers into his stores. "We have four locations in Statesboro, and we are as busy as ever," he said. "The buying and selling of gold is a significant part of our business. It is an opportunity for us to meet and serve customers that might not have come in here for any other reason."