Economic jitters and soaring gold prices create a frenzy for US jewelry merchants
LOS ANGELES (AP) — At the biggest jewelry center in the United States, Alberto Hernandez fired up his machine on a recent day and waited until it glowed bright orange inside before shoveling in an assortment of rings, earrings and necklaces weighing about as much as a bar of soap: just under 100 grams, or 3.2 troy ounces.
Minutes later, the bubbling liquid metal was cooling in a rectangular cast the size of a woman's shoe. An X-ray machine determined it was 56.5% gold, making it worth $177,000 based on the price of gold that day.
As gold prices soar to record highs during global economic jitters, hundreds of thousands of dollars' worth of gold are circulating through the doors of St. Vincent Jewelry Center in downtown Los Angeles on any given day.
Many of the center's 500 independent tenants, which include jewelers, gold refiners and assayers, say they have never seen such a surge in customers.
'Right now, we're seeing a lot of rappers and stuff melting their big pieces,' said Alberto's nephew, Sabashden Hernandez, who works at A&M Precious Metals. 'We're getting a lot of new customers who are just getting all of their grandfather's stuff, melting it down pretty much.'
Gold's current rally comes as President Donald Trump issues ever-changing announcements on tariffs, roiling financial markets and threatening to reignite inflation.
In response, people across the country are flocking to sell or melt down their old jewelry for quick cash, including middlemen like pawn shop owners. Others, thinking their money might be safer in gold than in the volatile stock market, are snapping it up just as fast.
Los Angeles jeweler Olivia Kazanjian said people are even bringing in family heirlooms.
'They're melting things with their family's wedding dates and things from the 1800s,' Kazanjian said.
She recently paid a client for a 14-karat gold woven bracelet with intricate blue enamel work that could be turned into a brooch. The customer walked away with $3,200 for the amount of gold contained in the piece measured in troy ounces, the standard for precious metals equivalent to 31 grams.
But Kazanjian doesn't plan to melt the piece. The real artistic and historical value was a lot more, she said.
'It's just stunning … and you won't see that kind of craftsmanship again,' Kazanjian said, adding she has persuaded some customers to change their minds about melting items. 'It's a piece of history, and if you're lucky enough to inherit it, it's a piece of your family.'
Businesses on the sales side of the action, offering gold bars and other material, also are working hard to keep up with the frenzy.
'Stuff comes in and it goes right out,' said Edwin Feijoo, who owns Stefko Cash for Gold in Pennsylvania and receives shipments from customers across the U.S. looking to sell their gold. 'Everybody's busy right now.'
Business hasn't been good for everyone, though.
For some jewelers who source their products from places abroad like Italy, Turkey and China, the combination of high gold prices and added tariffs have cut into profit margins and hurt demand.
'Our profit margins are so razor thin here,' said Puzant Berberian, whose family founded V&P Jewelry inside St. Vincent in 1983. Berberian said he recently paid an extra $16,000 on a package from overseas.
Customers also are feeling 'sticker shock' when they can't afford the things they used to. A chunky, 14-karat gold bracelet weighing about 10 grams (0.32 troy ounces) might have sold for around $600 last year, but now it's closer to $900, Berberian said.
Some believe those trends could continue, both for consumers and businesses.
Customers hoping to buy bullion 'think gold will go up' even more, according to Sam Nguyen, whose business, Newport Gold Post Inc., has bought and sold gold and other precious metals at St. Vincent for five years. While gold has cooled from its record high of $3,500 per troy ounce, Nguyen thinks it could reach $4,000 to $5,000 by year's end.
Jeff Clark agrees. The founder of The Gold Advisor, which provides investment advice, said he wouldn't be surprised if gold prices continue rising since the metal is considered a haven for people to park their money when there is anxiety about a possible recession.
'History shows it has gone much higher in the past,' Clark said, referring to a frenzy in the 1970s when the average price of gold increased 17-fold amid double-digit inflation rates. 'If the fear and uncertainty continues in the general populace, the prices are going to keep going up.'
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