Cash for gold signs can be found everywhere these days as the value of gold continues to reach all-time highs. Experts say that traditionally when stock values are down, gold values go up. Currently gold is valued at nearly $2000 per ounce, but is it time to buy, sell, or hold off?
Unemployment rates and fear of a double-dip recession have caused gold rates to rise. Experts say the increase is due more to political reasons than anything else and that the risks of investing in gold right now outweigh the rewards.
“It’s not backed by any major currencies, it doesn’t produce dividends, it doesn’t produce cash flow, therefore it’s truly a speculation play,” said Jim Stoops, Vice President and Financial Consultant for Charles Schwab.
While the company does sometimes advise clients to invest in commodities such as gold, they urge their clients to diversify their portfolios. They recommend no investment make up more than 10% of a client’s portfolio.
“You can consult with anyone from Enron, or Worldcom, or some of those others that got overweighted in their portfolio,” said Stoops. “All of a sudden if that particular investment, it falls off heavily, and now they’re investing, their financial lives are ruined as a result.”
Gold prices mean that even your old jewelry is worth some money. One woman who walked into Diamond Gallery found that her bracelet was worth more than $600.
Managers at the store say they’ve seen more people selling gold at the store, not just because of the gold value right now, but because they’re fighting the tough economy.
“People are having a harder time paying some of their bills and gold is a good way to help fill the gap if maybe they’re just short a little bit,” said Jennifer Simonson, Store Manager at Diamond Gallery.
If you’re looking to sell gold right now, here’s a few tips:
1. Make sure you go to a reputable establishment.
2. Look for local or Better Business Bureau rankings.
3. Make sure the company weighs the gold in front of you.
4. Don’t sell your gold unless you’re getting the money on the spot.
“If somebody’s not willing to write you a check right there on the spot, it means that they don’t have the funds to back it,” said Simonson. “It means they’re using that person’s gold to literally make a profit and then pay that person afterward.”
However, receiving payment through a check, as opposed to cash, is normal. Experts urge those considering selling gold, or investing in it as a commodity, to think about their long-term financial plans because the value could drop as quickly as it has risen.
WANT MORE LOCAL NEWS?
Get daily news headlines delivered to your inbox!Sign Up Today!