‘We Buy Gold’ craze brings public warning

Editor September 9, 2011 Comments Off on ‘We Buy Gold’ craze brings public warning

By KEVIN CHIRI
Slidell news bureau

SLIDELL — Buyer beware.
That is the warning when it comes to the “We Buy Gold” craze that has taken the Slidell market, as well as the country, by storm.
With gold prices already hitting an all-time high of $1,900 an ounce, “We Buy Gold” businesses have been popping up on virtually every corner.
In Slidell alone, you can drive down any major highway and see some form of the We Buy Gold business, enticing individuals to bring their gold or silver items in.
Two of Slidell’s longtime business families, that deal in the “We Buy Gold” business, encourage those with gold or silver to shop around before deciding where to sell your precious metals.
“Right now there are places I know of that are paying as little as 40 cents on the dollar for gold, and they are bragging to people about it,” said Mike Perkins, owner for over 30 years of Deep South Gold in Slidell. “That kind of business is going on right now in Slidell, and it’s very rampant. I get very aggravated about that since it’s downright thievery.”
Perkins said most reputable gold buyers will work on a profit margin of 10 percent or less, which is where he operates.
“Everywhere you look there are businesses advertising that they pay the highest prices for gold,” he said. “But we have checked and found many of them are practically robbing people, when you consider what they really pay.
“My advice is for people to shop around. Go to several places and make sure you are getting the best price,” he said.
Todd Corwin, general manager at Reine’s Diamonds & Fine Jewelry in Slidell, may be a competitor with Perkins, but was in complete agreement.
“You really should shop it around. I agree,” he said. “This is a new venture for many of the businesses you see, so you have to make sure you are dealing with reputable businesses. The real question is to see how many of these places are still in business six months down the road.”
Corwin and Perkins both said they have had individuals come to their store, who did shop other places, and then realized how low the others were offering to pay.
“There are a lot of people being taken advantage of right now,” Corwin said. “It’s a tough economy and I know of businesses making 60 percent on the gold they are buying.”
Both businessmen said they are seeing a large percentage of those selling gold who are doing it for economic needs. But others see the price of gold so high that they view it as a chance to make a little money for something special.
“Most are selling it since they actually need the money,” Corwin said. “But I had someone who brought in their gold since they figured they could take a vacation on what they made, since the price is so high right now.”
Perkins, considered one of the foremost experts locally on gold prices due to his many years of experience, said no one can be sure how much higher the price will go.
“No one has any earthly idea where it will stop since there is no faith in the U.S. dollar right now, and gold is a solid commodity. I definitely see it going to $2,000 or higher,” he said. “As long as the economy struggles, this won’t change. I still think our housing market in this area hasn’t bottomed out yet, and now we are losing NASA, Avondale is shutting down and we don’t have any major new industry bringing jobs here. It’s a very uncertain future with this economy.”
Gold prices were $1,200 an ounce a year ago, so the rise is very evident. Silver was $20 an ounce a year ago and is now trading in the $40 range.

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