By Eddie Van Der Walt and Ranjeetha Pakiam and Swansy Afonso
The surprising rebound in gold prices this year has given new life to unwanted jewelry, coins and trinkets -- in the melting pot.
More than a third of the world’s bullion supply usually comes from recycled metal, but purchases at pawn shops and cash-for-gold companies had slowed during a three-year slump in the market. That’s all changed. With prices headed for their biggest annual gain since 2010, more people are unloading old treasures, recyclers are expanding capacity and some jewelers are seeing their businesses transformed.
“We’re buying more gold than we’re selling now,” said Mark Hicks, the owner of Farringdons, a jeweler in the Hatton Gardens gold district of London. “When there is an increase in the gold price, and when that gets reported, people go digging in their cupboards and drawers and bring out all the little items they don’t want, and they bring it to us.”
Almost all the gold ever mined is still around in one form or another, so recycling everything from jewelry to electronic circuit boards has been a key source of supply. Prices remain the biggest influence on the scrap industry. When bullion tumbled as much as 45 percent from a record in 2011, the amount melted at refineries fell, reaching an eight-year low in 2015, World Gold Council data show.
But in the first six months of the year, recycling is up about 10 percent from the same period in 2015, heading for the first annual increase since 2009, Gold Council data show. Prices have jumped 26 percent in 2016, touching a two-year high of $1,375.34 an ounce in July, and had their biggest first-half rally since 1974. Bullion traded at $1,340 on Tuesday.
That was enough incentive for Soon Beng Gee, a 43-year-old small business owner in Singapore. He gathered up old necklaces and bracelets that had been in his family for two decades but that no one was wearing anymore. He sold them to a local dealer.
The ornaments were “quite bulky, and the designs were old-fashioned,” Soon said. “If the price is good, might as well sell.”