The economic news is not improving, but the glittering value of gold may be a saving grace for some cash-strapped Toronto consumers.
With bankruptcies up 20 per cent, and unemployment still high at 7.2 per cent, some experts say gold is one smart answer.
The Cashman, Toronto’s own Russell Oliver of Oliver Jewellery has been buying gold from the public for over 40 years. His shop at 366 Eglinton Ave. W. has the feel of a doctor’s office. The walls are white and the counter is also white with a glass top. Clear plastic chairs are lined up on the opposite wall, underneath the tastefully framed pictures of the Cashman’s news coverage. The back wall has three small window kiosks where loans are dispensed and jewellery becomes the collateral.
“Jewelry is a beautiful asset, it is so portable, that is the beauty of jewelry,” Oliver said in an interview. “You can transport it from one country to another, from your home to your pawnbroker or whatever the case may be. I can put a million dollars of gold in my pocket without any problems.”
The current value of gold is $1,466.67 per ounce according to the Gold Price Network. It was selling for under $400 per ounce in 2004 and reached its peak in 2011 at $1,900 per ounce, according to the Associated Press.
Oliver appreciates the need for privacy. Some customers are just not comfortable visiting a pawnbroker. Most of all they are concerned they may not get a fair price.
The Cashman doesn’t ask where his customers spend their money, although some have told him what they do with the cash they receive at his shop.
“The most common is to pay bills, it is as boring as that, ‘My Visa bill and I got to pay it and I don’t want to go bankrupt’,” Oliver said.
Oliver’s divorced clientele have also benefited from the high price of gold, as they convert the family assets — the home, clothing and jewelry– into cash. His advice for divorcing couples? Keep the emotion out of the sale.
“It is only things you are selling, it is not like you are selling your body or an operation or anything, it is just a question of getting a little bit more or a little bit less for whatever you are selling,” he said.
Selling gold made easy
The ability to sell gold for cash has taken on a social component that can take place in a private home. Companies like the Gold PartyCanada, founded in Montreal and now operating nationally, host an average of 20-25 gold parties a week in Canada, according to founder Jordan Stein.
Lorna Glickman D’Onofrio of Richmond Hill, Ontario, held a gold party a few years ago where she invited friends and family to bring their unused gold to sell for cash. Representatives of Gold Party brought their own scales and cash, they weighed the gold each guest brought and paid cash on the spot. Glickman D’Onofrio found it to be a “win-win” situation for everyone involved: she earned $800 that evening as hostess.
There was only one catch, though, and that was duplicating the event, since most people have only a finite amount of gold to sell. Stein acknowledges this concern.
“People only have so much to sell and need time to accumulate more,” he said.
Creating gold collateral
The Cashman offers loans, too
Gold can be a renewable asset for those to wish to hold onto their gold. And that is the other side of the pawnbroker business that Russell Oliver runs, although he prefers to call it “loans”.
He said usually, Canadians who own gold don’t like to part with it.
But the tradition is strong in Toronto’s multi-cultural community including those coming from Europe, Asia, Africa and Latin America, he says, who use their valuables for secured loans.
Oliver has one customer who would never sell his $10,000 Rolex watch, but is happy to hand it over temporarily for a $5,000 loan whenever he needs money. Most transactions are for $1,000, he said. Oliver’s interest rate is five per cent per month.