BOSTON (CBS) – For many local jewelers, the high price of gold has sparked a lucrative side business buying the precious metal from a rapidly growing number of new customers.
Lines out the door of some shops are a daily occurrence, as customers — strapped for cash in a tough economy — turn their gold trinkets into cash.
Jewelers are loading recycling bins with gold coins, wedding bands and even fillings.
“People sell everything — watches, flatware, jewelry,” said Mark Rogozinski, president of Marquis Jewelers, which he has owned for 35 years.
“We had the largest volume of business in 2011 that we’ve ever done.”
The gold rush at jewelry stores and pawn brokers is being driven by the high price of gold — currently worth about $1,610 for a 24K ounce — as well as the sluggish economy, which has driven many people to try and generate cash by reselling goods, even if they come from their mouths.
Local jewelry stores and pawn shops say that while the profit margins are low on buying gold jewelry (most take 10 percent off the price of what a gold piece is worth), they make up for the margins by a large volume of that type of business.
It’s been a welcome source of revenue for jewelers, many of whom have seen a decline in sales since the recession hit.
Most jewelry stores try to make about a 10 percent profit when selling back to refineries, who take the gold and melt it.
Rogozinski also figures it’s good public relations.
“The economy is such that people need money… When they get a job, they’ll come back and buy from me,” he told the Boston Business Journal.
He says people have left his store after making as little as $50, or as much as $20,000.
The peak for demand in reselling gold and silver jewelry, says Rogozinski, was last August, but demand is still high, with around 30 to 50 people stopping by each day.
In 2008, when the price of gold started to rise, Rogozinski started advertising heavily on local radio stations. He says sales are up 18 percent this year.
Lisa van der Pool of the Boston Business Journal can be seen weekdays at 6 a.m. on WBZ-TV.
You can follow Lisa on Twitter at @lvanderpool.