Has cash for gold lost its lustre?
Recent reports seem to indicate that the high streets of most Irish towns will no longer contain the ubiquitous cash for gold shop. It seems like only yesterday that everyone was desperate to relieve you of all that unwanted gold. So much so that the criminal class took it upon themselves to relieve you of the wanted variety too. Questions were asked in Dail about the possibility of regulating the trade (Minister Shatter declined as he was afraid it would interfere with entrepreneurship). All this chaos was caused by the record price of gold. It rose from $835 per oz troy in January 2008 to $1,850 per oz troy in September 2011. But what a difference a year makes. Recovery in other markets such as housing, coupled with rumours of Cyprus being forced to sell gold reserves by the IMF saw the price fall to $1,220 in December 2013. Currently is seems to be holding at around $1,250 per oz troy. This is bad for the gold dealers and many have closed their doors. While some might say good riddance (and who could blame them) many folk have lost their jobs as a result. Industry insiders have claimed that the gold price has bottomed out and will rise again. Of course they have a vested interest in talking the market up again, much in the same way as estate agents are exaggerating the housing market in Dublin right now. However don’t write them off just yet. If we can learn anything from history it is that no matter how stable markets are claimed to be, the only sure thing is that they are not and when the next inevitable crash comes keep an eye out for those gaudy temporary signs claiming “top prices paid for your gold”. © David Dupuy 2014