According to recent market reports (as of November 26), SPDR Gold Trust (GLD) stated that its holdings remained unchanged from the previous trading day at 41,316,740 ounces. The IShares Silver Trust (SLV) stated that its holdings declined by 5,865,684 ounces to 344.374 million ounces. Market experts have suggested that the holding pattern, as well as the slightly lowered prices indicate a decrease in safe haven demand. Recent data on the economic situation in the US has at least temporarily arrested some of the more pressing fears about the economy, and the price of gold has typically risen and fallen inversely to the strength of the dollar.

What this all means for those in San Diego and greater California who want to sell gold is that the times remain good for receiving top prices for your gold jewelry, dental gold, scrap gold, and other gold items at a San Diego gold refinery or other precious metal buyer. Will you be able to get a better return if you hold on to those item for a little while longer? Maybe. But, of course, gold prices could also fall soon, as well. All we can say for sure is that current gold prices will give San Diego sellers a strong return on their luxury gift assets made of gold.

Local San Diego pawn shops stand to profit from having two less competitors in the crowded retail jewelry market. National Jeweler Magazine reports that Friedman’s Jewelers filed for Chapter 11 bankruptcy protection in January, with Whitehall following suit in June. This is a surprising development considering that two months earlier, the Chicago-based Whitehall acquired 78 shuttering Friedman’s stores for $14.3 million.

According to National Jeweler’s Top 50 2008 list ranking of the largest jewelry chains in terms of store units, Friedman’s was the third-largest chain in North America, listing a total of 455 stores before it went bankrupt, while Whitehall ranked at No. 5, with 375 stores as of April 11. These two Chapter 11 cases are a major shake-up among North American retail jewelry chains, knocking down two of the nation’s top five jewelry-only retailers in terms of number of store units. According to industry analyst Ken Gassman, Friedman’s shoppers, who brought in average sales tickets of $165 to $175, will go to Wal-Mart or pawn shops to buy their jewelry now.

Since Wal-Mart doesn’t sell pre-owned and restored-to-new condition jewelry that leaves a huge market gap for local pawn shops to fill, especially given the rising trend of consumers going to pawn shops to buy used jewelry which has been restored to look just like new. Unlike buying a used car, which after ten years of being driven, will never quite smell, feel, or look new (not to mention mechanical problems that continually arise with pre-owned vehicles), a used gold and diamond ring can be restored to look just as new as the first day it was bought. The only give-away might be the styling, but for classic traditional-style jewelry, this is rarely an issue, since certain designs never really go out of style for a large portion of the general population.

So where is the value factor here? Very simple: a pawn shop might loan $100 on a gold diamond-set eternity ring, which originally retailed for $700 (with manufacturing, wholesale and retail mark-ups, financing, packaging, warranty, service, and overheads, etc. making the difference between 100-700). That’s because the pawn shop has to assume that if the customer doesn’t reclaim the ring, he may need to melt it and sell the materials to a refinery and diamond brokerage, and the materials may only be worth $150. In the meantime, the pawn shop earns his profits from the interest charged on the $100 loan.

Let’s assume that after 6 months the customer decides not to re-claim the ring, so the pawn shop now owns it. And let’s assume that the ring looks nice enough to be re-sold, and that the pawnshop is not desperate for cash, and can afford to put it up for retail in his showcase. Many pawn shops are now taking such rings and sending them to a goldsmith to be restored to like-new condition (such that one could not really see any difference between this ring, and an actual new one at Wal-Mart). When the ring comes back, the pawnshop may have only invested $20 to have this basic restoration done (assuming he is sending regular business to the same goldsmith).

Now the pawn shop can put the ring out for sale at around $350 retail, but willing to discount it to $300 to close the sale. The end result is that the customer gets a like-new gold diamond-set eternity ring for $300, which she would have paid $700 for at a mall jeweler, or $500 for at Wal-Mart (since Wal-Mart buys direct from the factories, they by-pass the extra distributor’s mark-ups). So now we have pawn shops competing with Wal-Mart, offering fine gold like-new jewelry at substantial savings.

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When folks in San Diego look to sell gold it is often dental gold. If you are a San Diego dentist or someone looking to sell a gold filling then read this article before choosing a buyer: Advice for Dental Gold Sellers.

This Week’s Gold Seller Question:

What is a good price for dental gold scraps by the gram?

Answer From: San Diego Jewelry Buyers

Depending on the gold purity of your dental scraps, we would be paying you roughly between $10.00 and $20.00 per gram. Let me explain how that works: Dental gold scraps can vary in actual karat rating (gold purity) from between 40% gold content all the way up to as high as 80%. So, for example, if gold is trading on the market at $900 per troy ounce, and your scraps tested at 40% gold purity, then we would be paying you $9.83 per gram. If your scraps tested at 80% gold purity, then we would be paying you $19.67. These figures are calculated at 85% of gold’s current trading price, to leave room for operating and refining costs, and to cover risk of gold prices taking a sudden drop. These figures are based on the assumption that you have only a small quantity of gold (less than one ounce), but in case you have a lot of dental gold we sometimes pay higher for larger quantities.

We tell customers that the best thing to do is come into our office so that we can test the karat rating of their dental gold scraps, and let us make them an offer. There is no obligation to sell to us, and we offer this service free of charge. We’re available any time from 9:00 AM till 4:00 PM Monday through Friday, no appointment necessary. Our office is located at 861 Sixth Avenue (between E Street and F Street), in the Jewelers Exchange Building, downtown San Diego (in the Gaslamp District). We’re at the far right corner of the ground floor, suite number 125. Please ask for Carl Blackburn. You may call ahead if you’d like, to let us know what time you’ll be coming in, our telephone number is (619) 236-9603.

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Here at the San Diego Luxury Pawn Shop Report we are always looking for unusal news stories that jewelry lovers might be intrigued or surprised by. Here’s a good item: Lesotho Unearths 478 Carat Diamond!