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Writer's pictureA&F Pawn Jewelry and Loan

Is Gold a good investment from a Pawn Brokers Perspective?



With the price of Gold dropping does it make sense to continue to invest in the shiny metal? Our customers use Gold as a hedge for when times get tough and they may need some cash to hold them over til payday. Gold has intrinsic value and will always be liquid for us as Pawn Brokers. So in my view Gold is not a great investment but it is more of a tool like cash. Gold fluctuates in value just like currencies do such as the dollar and investors have a huge influence on price direction. Gold has been in a downward trend for more than five years now and I am not sure when it will turn around. It looked like it was going to move in a positive direction during the 2016 presidential election but the market reacted to a more pro business environment. Gold dropped after-hours to $1,100 on election night and then moved back to $1,300 until recently. Gold once again is under pressure and the market has begun a descent as well into correction territory. My view would be gold should increase in value for stability as the market starts to unwind due to the overnight lending rates were kept too low for way too long. Price action for Gold is negative and looks like it will be going lower. So the short-term outlook for Gold is not the best place to invest but gold jewelry has value and is liquid. Some folks invest in gold jewelry in the hopes it will increase in value but rarely is the case. Pawn shops base what they offer on Gold using the current spot price. Most retailers sell gold 2-3 times over spot price. So when you are in the market for a Gold chain or ring stop by our Pawn Shop here in Sarasota for a great everyday deal.


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