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Bargain hunters join the gold rush as prices drop

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Julie Power

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Mal Maiden: What happened to gold?

What was behind gold’s breakneck two-day price plunge, and why are buyers cautiously move back in? Business columnist Mal Maiden explains

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Sales of gold bullion and gold chains are boiling over as Sydney buyers rush to buy at bargain prices of around $1332 an ounce, about $200 cheaper than four days ago and $400 cheaper than when the price peaked two years ago.

Not since the global financial crisis have the phones rung so hot from gold buyers, said Jordan Eliseo, chief economist of the Australian Bullion Company on Pitt Street.

Chasing a good deal: members of the public line up at the Australian Bullion Company on Pitt Street to buy gold.

Chasing a good deal: members of the public line up at the Australian Bullion Company on Pitt Street to buy gold. Photo: James Brickwood

Sales had been so strong the company's phone system nearly crashed. The company had to hire temps to deal with customers phoning and waiting in queues of up to 60 to 80 to get into the company's already crowded salesrooms.

The company's chief executive, Janie Simpson, only had time to email, ''OMG, it is bedlam - has been like that for 3 days!!!!''

Mr Eliseo said more than 95 per cent of the company's business right now was selling gold.

''Everyone who wants physical gold is seeing it [the drop in the gold price] as an incredible buying opportunity instead of seeing it as the end of the gold market,'' he said.

It's not just sales of physical gold that are booming.

Roy Cohen, director of The Gold Company and First Gold, said interest in gold savings accounts were also ''exploding''.

Froy Fernandez, manager of pawn brokers Andrew Cash & Co in Blacktown, said sellers were hanging on to gold but there were plenty of people buying gold, especially 18 and 22 carat bracelets and chains. He'd been surprised by how many savvy buyers checked the gold price before visiting the store.

For consumers, the drop in the gold price to a two-year low means a chance to buy something impressive for much less. Builder Craig Kilby of Windsor, who was shopping at Linda & Co Designer Jewellers in Broadway this week, said he was ''definitely'' making plans to buy some gold jewellery to give his wife on Mother's Day.

The impact of the fall in the gold price had been ''massive,'' said Michael Sobbi, manager of the jeweller.

''We are selling a lot of solid gold chains,'' he said. A heavy gold bracelet which normally retailed for $10,000 would be about $1200 cheaper after the fall in the gold price was taken into account.

14 comments so far

  • What a great sale .And of course it wasnt even planned to increase demand or anything like that.What a fortuitous outcome for such an unexpected , and perverse event as the plunging price coincident with talk of nuclear war. Still , at least now thne rapid price rise will concur with "normalcy".

    Commenter
    Kane
    Date and time
    April 18, 2013, 10:04AM
    • "Roy Cohen, director of The Gold Company and First Gold, said interest in gold savings accounts were also ''exploding''."

      This is not good news. These savings accounts are fractional reserve - which means that there is much more "paper gold" sold than the physical gold they hold.

      Remember people: the paper gold market is a ponzi scheme. Get physical: if you can't hold it you don't own it.

      Commenter
      Deflationist
      Date and time
      April 18, 2013, 10:34AM
      • "Your bank savings accounts are fractional reserve - which means that there is much more "money" sold out as debt than money or assets your bank holds." Fixed it for you.

        Pretty sure the FirstGold accounts are an allocated gold structure - that is, you own what you buy, but they keep it for you. But you could and should always check :)

        Commenter
        Mike W
        Location
        Sydney
        Date and time
        April 18, 2013, 12:24PM
    • Don't these fools know the global financial crisis is over. The Euro and the US Dollar are going from strength to strength. They cannot print enough of them.

      Commenter
      Jezz
      Date and time
      April 18, 2013, 10:35AM
      • Gold is a wise investment. Countries that print more money are the ones to avoid because it sends their inflation spiraling upwards. People have to pay more for everything, savings need to increase, confidence falls. Its usually only countries that have massive debt which they can't repay start to print money. The U.S. economy is in dire straits. They've just chosen to increase the normal level of debt from 4 trillion dollars to 14 trillion dollars which coincidentally was what they owed at the time. Basically they have just chosen to ignore the debt! Their national debt has increased to almost 17 trillion dollars. Gold usually falls after conflicts wind down and then soars again when conflict starts up again. It usually happens like clockwork. Its an easy way to make some extra money. All you have to do is hold onto it for several months to a year usually then it skyrockets again! You can make several hundred dollars profit per ounce. The catch is its not a fast process. War bonds have similar pricing fluctuations. The people that made the most money in the world during the Iraq War had bought surprisingly enough ....................war bonds.

        Commenter
        Noogie
        Location
        Bundy
        Date and time
        April 18, 2013, 8:04PM
    • The general public may be buying more gold bracelets but the investors are selling. There is talk of Cyrpus selling its gold along with other debt ridden countries. Bottom is some way off.

      Commenter
      Blueroom
      Location
      QLD
      Date and time
      April 18, 2013, 11:06AM
      • Looks like yesterday's buyers of gold are taking a real beating today.

        Commenter
        solomon
        Date and time
        April 18, 2013, 11:14AM
        • How stupid can some people be.
          Gold is going down and will continue to fall.
          Not so long ago it was 300 dollars an ounce and the major economies of the world began to off load much of their bullion into the market to break the link between the value of their currency and gold bullion.
          With the flood came a surge in prices when in fact the price should have fallen .
          Still, there are a lot of things we use in our every day life that is more expensive than gold and one that comes to mind is a spice most of use in our cooking,we put it in our stomach and then flush it down the sewer.

          Commenter
          tomcat
          Date and time
          April 18, 2013, 11:59AM
          • Gold? Hello, silver is where the riches will be made. Historically 1/15 ratio now its 1/50-60 gold if you want to keep your wealth, silver if you want to create wealth.
            And yes thenphysical the only way.... The commex can go to $0 both gold and slver however good luck getting any phys for the price its displaying today.

            Commenter
            Bee
            Location
            Silver sydney
            Date and time
            April 18, 2013, 12:42PM
            • Almost all the selling by the giant NY fraudsters was merely paper gold, not the real thing.
              There will almost certainly be a severe shortage of gold if the price stays this low for long.
              As Deflationist says buy the real thing not fake paper ponzi gold.
              The Chinese are no doubt buying every ounce they can get hold of, converting their US dollar holdings into physical gold.
              The US dollar is worth very little in actual fact as those holding them will get to realise eventually and probably very suddenly. It'll look like the Cyprus crisis but a heck of a lot larger.

              Commenter
              Richiroo
              Location
              Bangalow
              Date and time
              April 18, 2013, 1:01PM

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