Tokyo/Bangkok - It has been called the saint-seducing metal,
with good reason.
As the price of gold rests near record highs, people from
Spokane to Bangkok are selling jewellery or buying bullion, some are giving up
steady jobs to take to panning while theft of gold chains and watches is on the
rise worldwide.
"Panning for gold is becoming a real family affair,
more popular now because of the gold price," says Cordell Kent, who sells
do-it-yourself mining equipment in the 19th century Australian gold rush town
of Ballarat.
"Some people I know are making hundreds, even thousands
of dollars on the weekends."
Locals say rising prices and heavy rain earlier this year
are leading to a surge in amateur prospectors, looking for flakes of gold
washing up on riverbeds.
"We're seeing a whole new gold rush now around
Ballarat," Kent says.
Spot gold sells now for $1 830 an ounce, up nearly a third
this year. With currencies and stocks faltering and prices of other commodities
held back by slowing economic growth, the frenzy for gold has gone global.
Many are cashing in on the gold they have at home - or on
gold teeth - although the trend is slowing in the belief prices will rise
further.
"The most disgusting thing I had to deal with was a
rotten tooth with a gold crown from a customer's grandmother who died,"
said Munehiro Otsuki, the manager of a gold store in the Shinjuku district of
western Tokyo.
He also had a customer seeking to sell half a dozen Buddha
statues which he had thought were gold, but were in fact brass.
"When I called him this week after the evaluation, I
could tell by the way his voice changed that he was extremely disappointed. He
never came back."
At another store in the Kanda district of Tokyo, manager
Kenta Okiyama spoke of a middle-aged woman dressed in brand name clothes, the
smell of her expensive perfume wafting across the store, who poured 30 rings of
varying designs out on the table in front of her.
She told Okiyama these were rings she had received from
ex-husbands and boyfriends back in the heyday of the 1980s, Japan's
free-spending "bubble economy" era.
"When I showed her the ¥200 000 ($2 630) on the
calculator screen, the expression on her face changed in a way I will never
forget," Okiyama said. "She became so happy and smiled, saying 'I'll
take it right now'."
Ritsuko Aoki, a 40-year-old Tokyo housewife, said she was
selling old jewellery to buy domestic appliances.
"We did not even think that my old gold accessories
were worth anything before we saw news about people selling their gold on
TV," she said. "If gold prices rise more, I'll look for more
accessories in the depths of my closet."
Volatility, hedging
But experts say sales of recycled gold will rise only about 5% this year, against 30% in 2009. "Either people are waiting till the price hits $2 000 or they are running out," said Mariabi Peenya, a street side dealer in New York's Diamond District.
Nevertheless, canny investors see opportunities in gold's
price volatility. Although prices have been rising steadily since the start of
the year, gold has veered between as low as $1 600/oz to as high as $1 900 in
August.
And if dealing in physical gold, it's much easier since
there are no brokerage fees or delays in payment.
"We bought and sold twice and made a nice tidy
sum," said Ivy Mok, a mother of two who lives in Bangkok. "Not very
huge because we sold, and then the price went even higher.
She and her husband dealt in small gold bars bought and sold
in the well-guarded upstairs rooms of stores in the city's Chinatown district.
"People buy and sell their gold bars right there,"
Mok said. "But it was very stressful for me because once you are on the
streets, you are on your own with all your gold bars and you feel very vulnerable."
Her fears are not unfounded. One of the unsavoury sides of
gold's price surge has been a matching surge in crimes associated with the
metal.
Dubai, Casablanca, Pathanamthitta in southern India, all
have been hit by major robberies linked to gold in recent weeks. In Ghana, a
gold dealer is being accused of fraud after he alleged he was held up and
robbed of gold he had promised to customers.
Snatchings of gold chains are on the increase in London,
China, across the United States and many other parts of the globe, but
especially in India, the world's biggest buyer of gold.
In northern Vietnam, a gold shop owner, his wife and
19-month-old daughter were killed and the shop robbed 10 days ago in one of the
most violent crimes in the country in years. Another daughter was discovered
cowering under a bed with a severed hand.
In France, there were 183 armed robberies of jewellers in
the first half of 2011, up from 138 in the year-earlier period, according to
OCLCO, a police agency that tackles organised crime.
"If gold is a safe haven for people with savings, it is
also becoming it would seem a safe haven for armed robbers," said Frederic
Doidy, an OCLCO officer.