Clear out the closet, empty those drawers, pull out the flashlight and rummage around in the garage — the middle classes are apparently being driven to selling the family silver to make ends meet, and for the dealers buying the jewelry and antiques, it’s a nice little earner, in the parlance of London’s East End.
We have written some time ago about the surge of business enjoyed by Britain’s pawnbrokers as the value of gold and silver has soared, but a recent FT article throws light on just how substantial the trading in, melting down and recycling of silver and gold wares have become.
Pawnbrokers of course lend money against the items deposited with them, and as such, are required to keep the items in safekeeping for a pre-determined time as security against the loan, but gold and silver jewelers have seen a surge of activity as the price of silver has risen from £2.95 an ounce in 2003, to a high of £29.25 in 2011; meanwhile, gold has gone up almost fivefold in the past decade.
Gold averaged £1,079 an ounce last year, compared with £222 in 2003 according to the paper. That relatively sudden rise in value has encouraged hard-pressed (and in many cases, previously well-heeled) middle class citizens to cash in their family treasures for some much-needed hard cash.
One jeweler in Birmingham, Lois Jewellery, has his little 16-kg (35-lb) smelter running once, sometimes twice, a day last year, scrapping 8 tons of jewelry and antiques worth some $380 million. Not all of it is recent cheap jewelry bought on foreign holidays though. Apparently the owner recently received a Georgian spoon worthy of the Birmingham Museum of Art, and the head of an auction house visited one of the city’s outlets and by chance rummaged through the scrap bin — finding a Cartier necklace which he bought from the smelter for $1,600, only to sell at auction for $14,000!
The article explains that in 2010, the UK recovered just under 70 tons of fine gold from melted-down jewelry, up from 4.5 tons in 2005. But the assay office believes there is plenty of household jewelry still to be scrapped, pointing to a Mintel report last September that found just 9 percent of women and 3 percent of men had sold gold for cash, while 14 million UK adults have jewelry they never wear.
The lucky auctioneer mentioned earlier, Stephen Whittaker, fears his experience may be the tip of the iceberg with far more rare pieces having slipped through unnoticed. “I would imagine 25-30% of our heritage of gold and silver antique jewelry has been scrapped in the last two years,” he is quoted as saying.
At least for the dealers handling the smelting and recycling of items, it has proved a lucrative trade, betting on continued high prices and a hard-pressed populace — up to 30 similar melting shops are planned or in the process of being started.