With gold trading at record prices, Central Albertans are cashing in on a golden opportunity.
But Jack Fortin, owner of Jaxville Gold and Silver Trading Ltd. in downtown Red Deer, is urging those with dollar signs in their eyes to hold on to their fortune.
Fortin said if you have investment gold items like coins or bars in a safe place it is better to hold on to them.
“I wouldn’t sell any gold bullion now no matter what,” said Fortin. “It’s going to be so important in the years ahead.”
Still local marketwatchers are taking advantage of the skyrocket prices and cleaning out their jewelry boxes.
On Saturday, gold was trading at more than $1,700 an ounce. A year ago on the same date, the precious metal was trading at $1,200 an ounce and in 2009, it was trading at $955 an ounce.
Fortin said between March and June, his store was buying more gold then it was selling. Then in July they could not keep enough gold in stock.
“We sold out all our inventory and took more orders to get more gold in,” he said. “The demand just picked up. And just ahead of the price rise. I am not sure what triggered it. I think a lot of people were talking about the debt issues in the United States.”
Fortin said the sellers are those who are working on estate planning and want to leave their heirs cold cash instead of the gold jewelry. Then there are those sellers who bought in the 1970s and 1980s who decided to cash in and turn a good profit.
Of course there are those who are down on their luck and need the hard cash.
“People sell for different reasons,” he said.
“Jewelry is not a good way to invest in gold. We are buying it at 75 per cent of its melt value. That’s basically all you will get for it unless you sell it online privately as a jewelry item. We have a lot of people selling that because they need the money.”
Fortin’s business was closed for two weeks because he was attending a gold conference in London, England, which examined the current state of the gold market. When he returned his voice mail was full.
“We’re going to be swamped in here,” he said. “We’re at record high prices. This is something I knew would happen, gold would rise dramatically over time.”
Fortin uses Kitco.com, a Canadian gold dealer, to check the price of the precious metals. For buying and selling, the shop uses the price quoted in Canadian dollars.
The lowest he pays for gold material is 75 per cent of the gold value. This is typically materials that are sent to a refinery.
crhyno@www.reddeeradvocate.com