Crisis brings opportunities, they say. Golden ones too, with the fall in gold prices.
For some Singaporeans, it means heading to the pawnshops.
These savvy small-time gold investors are snapping up second-hand gold jewellery from these shops, saving up to 30 per cent on what they would pay for similar pieces from jewellery stores.
Gold slumped to US$705.53 per ounce on Oct 23, the lowest level since last September. It picked up slightly to US$734 yesterday.
People who go to jewellery stores now pay about $40 per gram of gold. But this excludes taxes and workmanship costs, which can come up to as much as $7 per gram.
On the other hand, most pawnshops are now charging only about $34 to $35 per gram of gold for their used jewellery, and this price includes tax.
Pawnshops put items up for sale when the owners who pledged them cannot repay their loans within six months.
A check with six pawnshops found that they have seen an increase of between 5 per cent and 20 per cent in their used jewellery business in the last two months.
A pawnshop can sell off any unredeemed item under $50 after six months. For items whose loan amount exceeds $50, a monthly public auction is held. If unsold, these items can be sold by the pawnbrokers as second-hand items.
Although items put under the glass counters include watches and gold-plated pens, it is the gold jewellery that many buyers fancy.
'Current gold prices are down, so it's a good deal for buyers,' said Mr Lam Kwi Peng, treasurer of the Singapore Pawnbrokers' Association.
Housewife K. Banu, 28, spent $1,000 on a gold necklace and two gold rings at a pawnshop last week. It was her first purchase in six months, prompted by a recent dip in gold prices.
'If the recession really hits later, at least I can get some money from these items. And I can wear them in the meantime,' she said.
The second-hand jewellery she buys is for daily use, 'but for gifts or grand occasions like weddings, I'll definitely still buy new ones from the shops in Serangoon Road', she said.
Another customer, Nepalese security officer Ram Gurung, 30, pawned a gold bangle for $1,000 last Thursday.
He intends to spend the money on other used gold items from pawnshops and plans to redeem his bangle when he gets his pay cheque next month.
'I need the cash to buy gold now as it's so cheap. I'm afraid prices will be too high later,' he said.
This article was first published in The Straits Times on November 09, 2008.
