$1,000-an-ounce prospects prompt new gold rush
<p style="margin: 0in 0in 0pt;" class="BODY">With the price of gold less than $15 from the elusive $1,000-an-ounce mark, Petersburg resident Scott Kirkman thought it would be the perfect time to stop by The Gold Center Inc. in Springfield and get some old jewelry appraised.
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<p style="margin: 0in 0in 0pt;" class="BODY">"I was watching the news this morning and saw the price had shot up. The last time I looked it was like $500, and now it's up to around $989," Kirkman said Monday.
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<p style="margin: 0in 0in 0pt;" class="BODY">While there are daily fluctuations, the price of gold has been dramatically increasing over the past six months. Near the end of August, the price was around $665 an ounce, and just a month ago, it was hovering around $890 an ounce.
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<p style="margin: 0in 0in 0pt;" class="BODY">Gold hit a new record Wednesday, rising from $983 an ounce in the morning to as high as $995 during the trading day. By late afternoon, it was in the $989 range.
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<p style="margin: 0in 0in 0pt;" class="BODY">The surge is attributed to a weak dollar, record-high oil prices and concerns about world political tensions that have increased the allure of precious metals as a safe-haven investment.
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<p style="margin: 0in 0in 0pt;" class="BODY">Jim Hausman, owner of The Gold Center, said he has seen a lot of people such as Kirkman come through his doors since the price started rising. Traffic has been so heavy, in fact, that employees are having a hard time handling all of the customers in the lobby, along with taking care of business with dealers from across the country, he said.
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<p style="margin: 0in 0in 0pt;" class="BODY">"There's not enough hours in the day," Hausman said.
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<p style="margin: 0in 0in 0pt;" class="BODY">Nearby at Denney Jewelers, 2901 W. Wabash Ave., employees are seeing a similar pattern. The store has been swamped with people wanting to cash in.
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<p style="margin: 0in 0in 0pt;" class="BODY">"We are seeing a dramatic increase in our jewelry-appraisal business," said Brian Denney, a certified gemologist appraiser at Denney Jewelers. "We are also seeing an increase in our restyling, or custom design, business. A lot of people are bringing in old jewelry that has been sitting around and trading those in on new pieces."
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<p style="margin: 0in 0in 0pt;" class="BODY">Denney doesn't think the price of gold is going to go down any time soon. But he said record prices also aren't deterring people from buying new pieces.
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<p style="margin: 0in 0in 0pt;" class="BODY">"Precious metals are becoming more precious, and in times of economic uncertainty, people are always looking to invest in those tangible assets," Denney said. "One of the great things about jewelry is they are making an investment that is beautiful, durable and wearable. It's kind of hard to wear stocks around your neck."
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<p style="margin: 0in 0in 0pt;" class="BODY">John Williams, an investment adviser with A.G. Edwards in Springfield, agreed that for the near term at least, gold will bring a high price.
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<p style="margin: 0in 0in 0pt;" class="BODY">"Historically, gold purchases are attractive to people who maybe don't want to be in the stock market," he said. "… Gold has been there a long time, so they go to the gold market.
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<p style="margin: 0in 0in 0pt;" class="BODY"> "As long as the dollar is weak, gold will continue to stay high. Psychologically, $1,000 an ounce might be an area where it might just hesitate for a while. Sort of like $100 crude oil."
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<p style="margin: 0in 0in 0pt;" class="BODY">But eventually, Williams thinks gold will hit $1,000 an once.
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<p style="margin: 0in 0in 0pt;" class="BODY">"It's pretty much there now," he said.
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<p style="margin: 0in 0in 0pt;" class="BODY">Back at The Gold Center, employees were testing Kirkman's jewelry to see how much it was worth.
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<p style="margin: 0in 0in 0pt;" class="BODY">As it turned out, most of the pieces didn't contain any gold, although one ring was made with about $20 of the precious metal.
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<p style="margin: 0in 0in 0pt;" class="BODY">Kirkman wasn't too upset.
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<p style="margin: 0in 0in 0pt;" class="BODY">"I could buy lunch with that," he said.
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<p style="margin: 0in 0in 0pt;" class="BODY">John Reynolds can be reached at (217) 788-1524.
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<p style="margin: 0in 0in 0pt;" class="BODY">Gold prices per ounce over the years
<p style="margin: 0in 0in 0pt;" class="BODY">March 5, 2001: $263
<p style="margin: 0in 0in 0pt;" class="BODY">March 5, 2003: $355
<p style="margin: 0in 0in 0pt;" class="BODY">March 5, 2005: $434
<p style="margin: 0in 0in 0pt;" class="BODY">March 5, 2007: $636
<p style="margin: 0in 0in 0pt;" class="BODY">Jan. 5, 2008: $859
<p style="margin: 0in 0in 0pt;" class="BODY">Feb. 5, 2008: $890
<p style="margin: 0in 0in 0pt;" class="BODY">March 5, 2008: $989
<p style="margin: 0in 0in 0pt;" class="BODY">Source: kitco.com (prices are estimates)
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<p style="margin: 0in 0in 0pt;" class="BODY">How to buy gold
<p style="margin: 0in 0in 0pt;" class="BODY">People who want to invest in gold have a few options.
<p style="margin: 0in 0in 0pt;" class="BODY">One of the easiest ways is to go to the Gold Center Inc., 3000 W. Iles Ave., and purchase one-ounce gold coins produced by the U.S. Mint. The current price is about $1,040 per coin.
<p style="margin: 0in 0in 0pt;" class="BODY">Another way to get in on the gold rush is through exchange traded funds. The funds trade like stocks, but they represent gold. The funds trade at a rate of 10 percent of the value of one ounce of gold. If gold were trading at $970 per ounce, for instance, an ETF price would be $97 a share.