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Friday, July 25, 2014

Price of gold sends owners digging

BY TIM POTTER
The Wichita Eagle

In Wichita and across the nation, the high price of gold is bringing items out of jewelry boxes and into businesses eager to buy a metal that has become extra precious in a troubled economy.

It often happens with jewelry that people have put away and forgotten about. Sometimes, the jewelry loses its sentimental value.

Now, owners of jewelry and other gold items are trying to cash in on a price that has topped $1,100 for an ounce of pure gold, local gold merchants say.

Experts disagree on where the price will go as investors buy gold to protect themselves against a falling dollar. Gold prices are up 7 percent just this month and 26 percent for the year.

"I'm seeing a lot of people who probably wouldn't bother selling it, until they've heard all the publicity on how high it is," said Pat Schaefer, owner and operator at Gold & Diamond Traders, 4861 E. Harry.

"There's gold shops on every corner in every city right now it seems like... because gold is so high."

In the past year and a half, Wichita police have seen at least eight gold-buying businesses open, said Lt. Barry Von Fange. Police oversee licensing and reporting requirements for the businesses.

Police are not seeing burglars target jewelry any more than they have in the past, Von Fange said.

But he said it's a good time to remind residents to take pictures of their jewelry and record identifying information, to increase the chance of recovering it if it gets stolen.

Businesses that buy gold are required to obtain a city license and ask for identification from those selling the gold. The seller must be 18 or older. Police receive records of gold purchases from the businesses and try to check the records to see whether they match reports of stolen items. To allow for the record check, the buyers have to keep the items for 14 days.

The operator of one Wichita gold business, who asked that his name not be used, said consumers should make sure they are bringing their gold to a legitimate enterprise. His advice: Make sure they are licensed and that they have a certified scale. Check with the Better Business Bureau.

"People do need to shop around," because the price varies from buyer to buyer, said Becca Herren, manager at A-OK Pawn, 1547 S. Oliver. She noticed a marked increase in people coming in with gold items starting about a year ago.

Sellers should keep in mind that jewelry rarely contains pure gold, merchants say. The higher the karat, the more it is worth. The gold value is based on the degree of purity and the weight.

The shops have ways to verify that an item has gold. One common method is an acid test.

Some gold buyers ask people to send in their items, with the pledge that they will be paid later. First, make sure the business is credible, said Sharon Werner, chief attorney of the district attorney's consumer fraud division.

Among questions Werner would ask: How long has the business been operating? Where is it located? Is there a phone number? Does the business's Web site look credible? Does the business advertise in reputable places? How much does it pay per gram compared to the current gold price and that of competitors? Is there a return policy?

The Kansas Attorney General's Office has received two complaints relating to "gold for cash" this year, said spokeswoman Ashley Anstaett.

The complaints came from consumers who thought they should have been paid more for their gold, Anstaett said.

"As far as we can tell, it is not a significant statewide problem," she said.

Contributing: Associated Press

Reach Tim Potter at 316-268-6684 or tpotter@wichitaeagle.com.

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