In an interview with Kitco News, Tobina Kahn, president of House of Kahn Estate Jewelers based in Chicago, said that her firm saw unprecedented traffic recently from customers looking to sell their gold jewellery, taking advantage of a 12-month high in prices.
Kahn added that along with unprecedented selling demand, they are busy navigating a volatile market as prices pushed to within striking distance of $2000 an ounce ahead of the weekend.
"This was phenomenal," she said. "I've been doing this for 50 years and haven't seen anything like this. If you had stayed in our store for an extra 20 minutes, you would have gotten a higher price for your gold. From the time I put the gold on the scale to pressing the reset button, the price was jumping $20."
Khan said that it is understandable why consumers are now cashing in on their unwanted gold jewellery as everyone is becoming more worried about the health of the economy and the banking sector. Gold prices have pushed solidly above $1900 as investors continue to digest the ongoing banking crisis following the collapse of Silicon Valley Bank, Signature Bank and Swiss-based Credit Suisse, one of Europe's largest banks.
While consumers are eager to turn their gold into U.S. dollars, Khan said the sentiment is positive and not one of desperation or fear.
"I think our customers are seeing the business headlines and the gold price for the first time in a long time and are taking advantage of the market. Our customers are bringing in their old jewellery that has been sitting in a drawer for years or that one earring because they lost the other one," she said. "They still believe in their bank, but they also realize it's a golden opportunity to sell."
Looking ahead, Kahn said that she expects more consumers to continue to sell their gold as prices eventually push above $2000 an ounce.
At the same time, Kahn's said that while consumers aren't desperate for money now, sentiment can quickly change as economic risks continue to grow. Wednesday, the Federal Reserve downplayed the banking crisis that has roiled financial markets for the past two weeks; it said that it remains focused on bringing inflation back down to its long-term 2% target.
"The US banking system is sound and resilient. Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks," the US central bank said in its monetary policy statement after Wednesday's meeting.
