The cute, skinny woman was in the Arcade Gold and Stamp Galleries in downtown Toronto again this week, after the price of gold topped $1,424 (U.S.) an ounce on Monday. It was her fourth visit in as many months.
On her first, she presented the gold jewellery she wanted to sell in a box. In her 40s and recently divorced, she was having a tight month. "By the fourth or fifth visit," said John Gainor, the coin expert behind the counter, "they're taking it off their bodies in the store." He did not say this with any relish.
This week she handed over two gold chains and a pair of rings, for which Mr. Gainor and Michael Barber, the shop's owner, paid her "melt price" - $500. She's still agonizing about her gold watch.
Another customer tried to unload a 98-ounce gold bar worth about $140,000. But she wanted cash, and the Arcade, which has been in business for 50 years, doesn't do that. Meanwhile the store has been fielding 30 phone inquiries a day. "Lots of people saying, I want to cash in my RRSP and buy silver or gold, can you help me?" Mr. Barber added.
The shop had also served a steady stream of Americans bearing gold from the vault a block away in the head office of the Bank of Nova Scotia, which still sells bullion. Before 1971, when the U.S. dollar was still backed by gold at $35 an ounce, Americans couldn't own gold privately, so they bought and stored it in Toronto until they were ready to sell. Many of them sold to Arcade this week. "That's the business we're living on today," Mr. Barber admitted.
These scenes were repeated all over the world this week, as the price of gold hit its latest zenith - which, adjusted for inflation, is still 40 per cent below its all-time high in 1980. The price has nearly doubled in the two years since globo-meltdown, and is up nearly 30 per cent since January. The world's financial unease is trying to decide if it wants to become all-out panic. Gold, the smirking devil of capitalism, once again looks hot because everything else does not.
Sucking debt in Ireland and Greece is weakening the Euro. The U.S. Federal Reserve's decision to pressure-inject another $600-billion into the U.S. economy will do the same to its dollar. That ups the odds of a currency smackdown at this week's G20 meeting in Korea.
Gold was booted even higher when Robert Zoellick, president of the World Bank, mused in public on Monday that the global monetary system "should also consider employing gold as an international reference point."
The statement was immediately (mis)interpreted as a call to return to the gold standard, 39 years after it had been abandoned. Just as immediately, Stanford economist Brad DeLong branded Mr. Zoellick the "stupidest man alive." Daring analysts predicted gold at $10,000 an ounce. J. P. Morgan Chase re-opened a bullion vault in Manhattan.
By the time Bank of Canada governor Mark Carney tried to calm everyone's nerves by declaring that gold "has no role to play in the international monetary system," gold fever was blooming like a flu. Money-for-gold ads are popping up everywhere. Sales of small home smelters are booming - really, home smelters.
Gold has been the financial refuge of last resort, the hedge of hedges, not to mention the lodestar of survivalist crackpots, since the dawn of civilization. The interesting question is why. A visit to a gold dealership like the Arcade can be enlightening.
"Gold is a store of value," Mr. Gainor said. "And people are becoming very concerned that paper money is worthless."
It's not always a pretty scene. Another visitor to the Arcade's coin-filled counters this week was a man with a pocketful of gold fillings - his own.
"We take the gold," Mr. Gainor said, shrugging on his coat to head home after a busy day. "But if it's still on the teeth, we don't like to take it. We don't like to smash the teeth."
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