Crisis advice: ‘Sell your shoes before your gold’

14 March, 2009, 08:53

The United States is experiencing a new kind of gold rush as many Americans are queuing up to sell their gold trinkets simply to make ends meet.

The value of gold is on the rise, and any income people can get in such a credit crisis is welcome.

Experts have warned, however: the rush to cash in on gold is shortsighted.

“All the way from a late spouse's wedding ring, to a grandfather's pocket watch – everything sentimental. They're destitute at this point and desperate for funds," says Nancy Metropolis, owner of American Gold Exchange in New Jersey.

Droves of customers are unloading their treasure chest of valuables in hope that the returns will pay for car repairs, electricity bills, or food.

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"Some weeks are bad. Sometimes it's hard to pay the bills," says local resident Ariel Mercado who sold his gold for cash.

The possibilities to sell gold are now everywhere, from newspapers to websites.

The rush comes as prices for an ounce of gold recently topped one thousand dollars.

US stimulus plans have become as frequent as happy hours on Friday, and the unemployment rate is inching closer to eight per cent.

For one resident it's inflation, not joblessness, that's beginning to cripple his quality of life:

"It's tough on the seniors because you can't work anymore. It's when you can't make a living and only live with what you have. It's a little bit more difficult," says the 79 year-old.

Within two hours he made two trips to the shop after retrieving more of his wife’s gold from home.

The current gold rush is keeping many Americans afloat during hard times, but those pawning off their precious metals may be taking a great risk, as selling off a commodity may end up being worth much more if the economy continues to nosedive.

Analyst Adrian Douglas says people should sell their shoes before gold. If the currency were to plummet, gold will be the saving grace.

"I would put gold and silver at the bottom of the list of assets to sell right now. They will be the way in which many people will go from rags to riches," said Adrian Douglas, CEO of Market Force Analysis in New York.

The economic crisis is presenting Americans with a real Catch-22: sell now for survival, or hang tight in case gloom turns into doom.