Wed, Nov 10, 2010
by Stephen Richard Witt
Wall Street is gripped by gold fever. The price of the metal topped $1,400 per ounce this month, the highest price in a generation, leading gold owners across the country to melt down their coin collections and family heirlooms. But the high demand from global markets means scarcity here at the Fulton Street jewelry district in Downtown Brooklyn. Most of the stores have “Cash 4 Gold” signs on their windows, but the local market for bling is frozen.
“There’s nothing left to buy,” says Albert Mandaby at Contessa Jewelers on Fulton. He says that anyone who needed to pawn jewelry has already done so. “They’ve sold everything,” he says.
Across the street at Nu Castle Jewelers you’ll hear the same thing.
“When gold first started going up we had all sorts of rings and jewelry coming in here,” says Andy D. of Nu Castle. “Now there’s a lot less. People can’t even afford to buy that stuff in the first place.”
Further down, in Bed-Stuy, it’s the same refrain.
“Business is slow,” says Tamir Cohen of Gold Rush Refiners.
“Like, thinking-of-closing-down-the-store slow,” he says.
Cohen doesn’t even sell jewelry. He only buys it and melts it down. But he agrees with the jewelers: the high price of the commodity has frozen the market. Anything that could have been melted down for cash has already been sold. He says trade was brisk in 2008 and 2009, when prices first started to spike. Now they’re the highest anyone’s ever seen, and no one can afford to buy anything new.
“I’m getting a lot of small stuff,” says Cohen. He brings out a 10-karat gold elephant the size of a hangnail. “I gave the guy a dollar for this. This is the kind of business I’m doing.”
And that’s the real thing. Many would-be sellers don’t even have that. Cohen pulls out a small plastic bag of counterfeit jewelry and slips it through an inch of bulletproof glass. Rings, jewels, pendants, nameplates.
“It’s all fake,” he says. “That whole bag isn’t worth a dollar.”
At Contessa, salesman Eddie Ahmed explains that for jewelers, the high price of gold is bad for business. He pulls out a series of 10-karat gold wrist chains and arrays them on a black velvet cloth on the glass countertop. They’re shiny but certainly nothing fancy. In the past, they would have retailed for $20. Now they cost $60. Ahmed says the high price kills sales and reduces the amount of gold you see on the street.
And if gold isn’t being put on the street, gold can’t come back from the street. Ahmed and Mandaby both say that all of the supply is sitting in the store as inventory, and that few people even own any jewelry to sell.
Andy D. of Nu Castle agrees.
“A lot of what the gold we buy, we melt it down and resell it out of here,” he says. “Nameplates, rings, whatever.”
Then he looks towards his wall of unsold bling: Masonic amulets and fat chain necklaces and diamond-studded grills, arrayed against a backdrop of crushed red velvet.
“People sell it,” he says, “but they can’t even afford to buy it.”