Author Topic: "We Buy Gold"...gone  (Read 3567 times)

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Offline Birdman

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"We Buy Gold"...gone
« on: December 21, 2013, 06:09:19 PM »
In my drive around town today, I observed something that I found interesting.  Two of the "We Buy Gold" type shops (the ones in strip malls along the busy roads) that were active a short while ago now had "For Lease" signs in their retail space.  I wonder what the final nail in their coffin was:  (1) gold dipping below $1200 shrinks their profit margin or (2) anybody eager to sell their gold already did so when prices were 50% higher and they have nothing left, or (3) anyone with gold remaining is holding on to it, hoping for prices to climb back up?  The market must have really turned sour for them to go out of business in December.  I would think that this time a year would be busy with people trying to sell some gold to get money to buy holiday gifts.

Whatever the reason, perhaps it means that flow of fresh gold pandas onto the market (from pawn shops, coin shops, & We Buy Gold shops) will continue to slow?  Has anyone else seen such "Cash for Gold" shops go out of business in their areas?

The gold opportunists are definitely getting shaken out of the market.

Offline 1668Chris

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Re: "We Buy Gold"...gone
« Reply #1 on: December 21, 2013, 07:38:57 PM »
I have not taken notice but I know some of their rules can be quite restrictive in turning around the gold.  For example, there is an estate jewelry store by me which I stop in from time to time.  They also buy gold, etc. and pay spot minus a very small margin.  By law they have to hold all items they buy for 10 days before sending it out.  This could be troublesome given the volatility in the price over the past year.  Also with the price so low compared to its peak I imagine people are more inclined to hold vs sell.

Offline pandamonium

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Re: "We Buy Gold"...gone
« Reply #2 on: December 22, 2013, 09:22:56 AM »
The gold recycle market accounted for approx. 40% of gold supply.  It is down today 4% plus.  Past articles have stated when the gold recycle market has tapped out the price rise will begin.  We should be close to the end of the recycle market.  The sheeple in the US have lost their precious metals to survive.  Once again the wealth is leaving the West for the East as our recycled precious metals have been shipped to refiners then to China.   Our Governments allow/encourage/manipulate the West citizens to give up the gold cheap.  The corrupt West official dumbs have transferred the wealth to the East as we all know.   The West is run by corporations and not the people.   It is no secret that China controlls the US dollar.  The Yuan today is the second most traded currency world wide as it passed the Euro.  China's yearly gold demand is now equal to or above the world mining output.  When the dollar drops in value, the East will control the intelligent sheeple of the West.   We let it happen with out a fight so we get what we deserve..........One last opinion...I think in the near future China will allow the flow of metals into China but not out.  When that happens then buying MCC in China will come to an end.........Some countries in Europe are doing that already.......


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Offline KeyDate1/2ozPandas

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Re: "We Buy Gold"...gone
« Reply #3 on: December 22, 2013, 12:36:23 PM »
The gold opportunists are definitely getting shaken out of the market.

There are three things at work here to explain the disappearance of "we buy gold shops", in order of importance:

1) Weak hands have completed their transactions and almost very few weak hands are left, most of which are due to death and divorce.  US economy is getting stronger, total employment is back to pre-recession level (neglecting quality of job) and residential real estate defaults have been cleared out of the system.  The days of people selling gold to pay their mortgage, put food on the table or buy Christmas presents are gone.

2) Strong hands sell when the price is opportunistic and rising, so lower gold has put them on the sidelines almost indefinitely.

3) Competition among these firm was intense, with very little money available once the group 1) above was exhausted.  Many didn't realize their business model requires a recession back drop to work.

4) Regulation for bullion business has increased dramatically in recent years, banks require AML plans for dealers and cities require expensive licenses to limit number players in the market and shut out hotel buyers.

Anyone in the business saw the writing on the wall starting late 2012 as the economy improved. 

What is more interesting and transformational is how the internet will destroy the bricks and mortars store fronts and coins show business models.  I am not predicting the end for either, but numbers will come down as the economy improves.  2009-2011 coins shows were great for buying and selling, 2012 was great for buying and average for selling, 2013 was below average for buying and selling, I expect 2014 to be even weaker on both fronts compared to 2013. 

Arif 

Offline Flegend35

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Re: "We Buy Gold"...gone
« Reply #4 on: December 22, 2013, 02:52:28 PM »
Arif is correct. I own a refinery and the rampant buying of gold scrap is down about 60%. Most of the we buy gold guys are out of business because they would pay around 40% of the value. You could have gotten away with this about 5 years ago. There is still plenty of scrap in the US. Not everyone had to go to the well to pay there mortgage.

Offline pandamonium

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Re: "We Buy Gold"...gone
« Reply #5 on: December 22, 2013, 03:36:00 PM »
That's good information as i could not find it online.  I still know people that sell metals to pay bills.  The economy here is still struggling.  Those that have the funds are buying bullion and my local coin shop gets new customers often, many from me as i encourage others to buy metals.   Its good to know that we still have scrap and it is not all sold.   Why is so much gold headed East when we need it here?.....

Offline Flegend35

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Re: "We Buy Gold"...gone
« Reply #6 on: December 22, 2013, 03:51:35 PM »
Think about how many jewelry stores that our out there. The buying is still out there just not as strong. The height was in 2011.

Offline r3globe

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Re: "We Buy Gold"...gone
« Reply #7 on: December 22, 2013, 04:30:40 PM »
This discussion is very interesting. Flegend35's commentary is particularly interesting because he has first hand knowledge.All of the coin dealers (most are in jewelry business too) I know complain of the lack of people selling coins and jewelery! Arif's comments about coin shows are accurate too. If you are a coin show frequenter armed with cash and knowledge, this is a very very opportune time for you.