WINDHAM – With gold prices hitting record highs in recent weeks, the modern-day twist on the 1849 gold rush isn’t limited to far-off trading floors. It’s hitting right here in the Lakes Region, as well.
It may not be a great time to enter the gold market, but those who already own gold jewelry, especially if they are strapped for cash, are taking advantage of the historic high prices and cashing in.
“This is the highest the price has been in the history of the universe,” said Jonathan Burnham, owner of Maine Pawn & Jewelry on Route 302 in Windham.
Burnham has been in business in Windham for 20 years and has never seen the price so high, or the demand so great. And in recent weeks, after several months of stagnant sales, Burnham is seeing a surge in customers wanting to cash in their gold.
“I get phone calls every day asking if I’m taking gold, but just lately there are a lot more people coming in. The last few weeks I’d say, when the media was really making people aware of the price. It’s just a good time to cash in,” he said.
However, with gold a historic hedge against economic volatility, the high prices may go even higher.
“It’s gone up a lot in a short period of time, so if you bought gold previously this is a good plateau,” Burnham said. “But you can’t predict. It could go up.”
The other Windham pawn shop, Outlaw Pawn, which opened three weeks ago on Route 302 near the Raymond line, is also doing well with gold prices high.
“It’s gold fever out there,” said owner Jesse James. “I don’t think there’s anyone in the public who’s not aware of gold prices right now. It’s definitely hot.”
With gold so expensive – about $1,780 an ounce on Wednesday – James keeps what he has acquired stashed away in a huge safe in a back room.
“It’s lag-bolted to the concrete, it’s not going anywhere,” he said. “And I’m installing bars on the windows and doors pretty soon here, too.”
James, who grew up in Medway, near Millinocket, has an interesting personal history with gold. He went out West several years ago and set up shop in an old gold mine, where he found a small nugget of gold. “I got the fever real bad after that,” and spent the next three months searching for more, he said.
“I found one piece of gold and thought I could find more,” he said. “I dug and dug and dug but didn’t find anything. It became an obsession really.”
With his new venture, James comes across plenty of gold. But the goal is to pay less for the gold than he sells it for, and when the price is rising and falling so dramatically, as it has in the last week, buying low and selling high isn’t always a sure bet.
“It’s my first foray into owning a pawnshop,” James said, “and I want to be fair to people because I know the economy is bad. But I pay attention all day to the price because I don’t want to lose money either. It’s kind of a timing thing.”
Burnham agrees. He said he doesn’t sell gold to refiners very often but did so when gold hit $1,742 an ounce a few weeks ago. What seemed like a good price actually wasn’t, however.
“I don’t really speculate,” Burnham said. “Refiners charge fees based on percentages and it doesn’t make sense to send them a little, so we wait until we have a good amount. So I actually sold quite a bit when it hit $1,742 but it went up to $1,830 right after, so I missed the peak. But that’s the way it goes.”
Once he decides to sell, James said he either sells it to other pawn shops or to a “smelter” who comes up once a month from New York. The smelter will eventually melt the gold jewelry down into pure gold and sell it back to jewelry manufacturers, effectively starting the cycle again.
So is now a good time to cash in, as Burham and James’ customers seem to be doing? What do Burnham and James see for gold’s future?
“It’s going to stay right here,” James predicted, “and then in a while I think it’s going to drop.”
Burnham’s take? “Based on my experience and keeping track of what market experts are saying,” he said, “I honestly think it’ll go up in the long-term, but remain volatile in the meantime.”
Jonathan Burnham, owner of Maine Pawn & Jewelry in North
Windham, uses a jeweler’s loupe to inspect the level of gold in a
necklace a customer brought in last Friday. With gold prices at
historic highs, Burnham is reporting record numbers of customers
wanting to sell him their gold jewelry. (Staff photo by John