GEORGE TOWN: With the price of gold slipping recently as the ringgit strengthens, there is a surge in interest at the retail level with people selling their gold jewellery to seize profit.
Jewellery shop owner Riyaz Mohd Shaul Hameed, 41, said the price of gold increased from about RM300 per gramme early this year up to RM380 at the end of July but has since dropped to about RM340.
“The changes have been drastic this year.
“When the price increased, more people were selling their jewellery collections.
“As gold is considered an asset that can be invested, customers who are selling may not necessarily be in need of money but they saw it as an opportunity to lock in profit,” he said.
This is despite the fact that when old gold jewellery is sold to shops, it is a market practice for shops to offer to buy the gold at about 20% below current gold prices.Jewellery shop owner Jack Lee, 35, who accepts trade-ins, said that since he is not a manufacturer, he is also a buyer – just like his customers but purchasing in larger quantities and being at risk of bigger losses when prices drop.
“If I accept gold jewellery when the rate is high, I am at risk when the value of gold drops,” he said at his shop in Komtar.
He explained that the recent price fluctuation was caused by the ringgit gaining value against the US dollar.
Fortunately, Lee said, history has proven that the price of gold has been rising over time and those who can afford to hold it will benefit in the long run.
“About 25 years ago, a piece of gold bar weighing 10g used to cost RM300 and about 10 years ago it went up to RM1,700. Today, it is RM4,050 for the same weight.”
Used gold jewellery trader Lee Theam Loong, 55, said he received higher traffic in March, April and May but it slowed down in June and July.
“As a trader who sells used gold jewellery, my prices are typically 6% to 7% lower than those of new items due to the absence of additional workmanship costs.
“At a selling rate of RM345 per gramme, many customers are willing to spend a bit more to exchange their old jewellery for something different,” he said.
At Lebuh Chulia, 43-year-old pawn shop manager Alex Tye said to avoid the risks of making a loss and being scammed with fake jewellery, he only pays about 70% of the amount normally offered by jewellery shops if customers come to sell their gold.
“Once sold to a jewellery shop, the item is gone and never to be seen again.
“At my place, I need to first take the risk and store it for six months for the customer. Only those certain about wanting their jewellery back would pawn it back.”
