Gold prices topped $4,200 an ounce last week — a record-shattering amount, driven by economic and political anxieties, some experts believe. The gold rush accelerated dramatically over the past seven months, when spot prices shot up $1,000 an ounce.
“Two months ago, I opened up Garden State Gold & Coin in West Milford in an attempt to kind of beat this rush — because we always knew it was coming,” said owner Matthew Eisenberg. “We just didn’t know it was going to come this fast. And we’ve seen, on average, about $10,000 a day in buying go to now over $100,000 a day in buying.”
Gold was selling for $2,000 an ounce, as far back as August 2020. The price fluctuated for several years, but started climbing in 2023. And this year gold prices started to spike.
“Just to give you an idea, we are melting solid gold Rolex ‘Presidentials’ for $12,000 and $13,000. Watches that, you know, are world-known. The value of the gold is surpassing the value of the piece,” he said.
Some people said they sold their gold to put toward a college fund or family vacation. And extra cash helps pay the bills, as the U.S. annual inflation rate rose to 2.% in August. But Rutgers University finance professor Ronnee Ades believes that $4,000-an-ounce figure is a trigger for many people.
“They’re not sitting there going, ‘what can I sell today?’ It’s, ‘Oh my God, the price of gold is historic, I could get a lot of money for this stuff’,” Ades said.
“And there’s not a lot of assets that people can sell. Think about it, your house and your car, you need to go to work. You need to live, you need to eat. But do you need gold? No,” she said.
The flip side to this gold coin
While maybe 90% of Eisenberg’s business consists of people selling their gold, the rest want to buy it — even at these prices.
“Generally, when gold goes up, it’s a hedge against inflation,” he said. “So that’s saying that there’s economic uncertainty around the world, that people are losing faith in the U.S. dollar. They’re losing faith in the stock market, so they want to diversify some of their portfolio into physical gold that they can hold.”
Rutgers University professor Farrokh Langdana echoed Eisenberg’s assessment.
“In other words, even Americans have decided gold is safer than the U.S. dollar,” Langdana said.
Bars and coins still sell out quickly at Costco, where company executives recently reported that gold sales rose by double digits in the three months ending Aug. 31. But Langdana warns that gold could also be a market bubble.
“If I had a couple of old bracelets lying around and I’m worried about my healthcare benefits going away, for example, sure, I’d unload. I’d sell that. That makes sense,” he said.
For New Jersey gold buyers there is some good news: This year, the state eliminated the sales tax on gold and silver bullion sales worth over $1,000, bringing New Jersey in line with most other states.
