Investors and precious metals traders failed to agree on the reasons behind the recent rise in gold prices. But for some, the price spike just means now is a good time to cash out.

The price of gold broke through 2,400 US dollars per ounce last week and reached a record high. The crazy rise is impressive. However, American gold jewelry stores and pawnshops have sprung up a large number of gold sellers.

At a Brooklyn pawn shop called King Gold & Pawn, there is an endless flow of customers who come to sell money. They don't care how high the price of gold can rise; they just want to raise more money to pay their bills and rent.

King Gold & Pawn and Gene Furman (Gene Furman), owner of Empire Gold Buyers, said, “People are treating gold as an unprecedented ATM.” Since gold prices began to rise at the end of February, the number of people coming to sell and pawn gold jewelry at Furman's Fifth Avenue store has more than tripled from normal levels.

One of them is Branden Sabino (Branden Sabino), a 30-year-old IT expert, who sold a gold necklace and a gold ring last week. He said, “Prices are high, and I need cash,” adding that he doesn't have any savings due to rising rent, groceries, and car insurance costs.

Undoubtedly, the speed and magnitude of the rise in gold prices is amazing, rising 17% since hitting a 2024 low in mid-February.

Investors often seek to hold gold as a safe-haven asset due to concerns about political, economic, and financial crises. The escalation of tension in the Middle East, the Russian-Ukrainian conflict, and the upcoming US election have once again highlighted the traditional status of gold as a safe haven asset. Meanwhile, some investors have been betting that inflation may remain high for a long time, which has supported the rise of gold. Although experts continue to debate the reason for the rise in gold prices, the result is much simpler: “The price of gold is high.”

Most of the world's gold is held by countries; the US alone has more than 8,000 tons, but private gold reserves are not uncommon.

For many people, their concept of a gold reserve is the 400-ounce gold bar that appeared in the movie “The Golden Finger” and the British theft comedy “The Sky Changer.” But in fact, dealers sell units as small as 1 gram (about 0.032 oz); there are also private jewelry or gold coins that are bought as gifts and stored in families for many years and passed down from generation to generation.

However, changes in fashion trends and financial demands mean that now there are fewer and fewer reasons to pass on old items to relatives. Moreover, the current price of gold is also quite attractive.

Tobina Kahn (Tobina Kahn), president of House of Kahn Estate Jewelers, said, “Young people no longer wear jewelry from their grandmother's time. Most young people want an Apple Watch, not a pocket watch.”

Gold watchers say most of the current demand comes from Asia and emerging markets. Since 2022, central banks, led by the Central Bank of China, have been buying gold on an unprecedented scale to get rid of their dependence on the US dollar.

Ordinary consumers in Asian countries are also buying gold, snapping up coins, gold bars, jewelry (even gold beans), and exchange-traded funds (ETFs) that track gold and gold mining stocks.

This is the complete opposite of the historical pattern that has dominated global gold trade for decades. Asian buyers tend to sell when the price of gold rises.

Adrian Ash (Adrian Ash), head of research at online gold investment service BullionVault, said that given the relatively strong economic strength of Western economies (especially the US), “people are not in a hurry to buy gold.” Although there are heated wars going on in both Gaza and Ukraine, Western investors are not currently feeling the seriousness of these disasters.”

In recent weeks, the volume of sell-offs on the BullionVault trading platform has more than doubled compared to the same period last year. “People are very happy to accept the current price level,” Ash said.

The lack of urgency for Western investors to hold gold is also reflected in weak sales at the US Mint, where sales of American Eagle coins in March recorded the worst results since 2019.

The sales volume of American Eagle coins in March was the lowest since 2019

Of course, long-term issues such as rising US debt levels and the health of the banking system, as well as concerns about inflation, mean that there are also investors who want to hold gold regardless of the price.

Jason Collins (Jason Collins), director of Gerrards Precious Metals in London's historic Hutton Gardens jewellery district, said some of his customers are still buying gold due to concerns about bank safety. He said, “If something bad suddenly happens in the UK, or the entire banking system collapses, the gold in your pocket won't collapse at that time.”

So, what is the next trend for gold? Tobina Kahn warned those holders who are still waiting for the time to sell and hope that gold will reach $3,000. Her opinion is don't wait.

She said, “Business is very busy. We are getting more calls from customers than ever before and they want to sell their jewelry. I told the customer to come soon while the price was still at an unprecedented level.”