Despite the U.S. economy continuing to exceed economists' expectations, the average consumer still faces ongoing challenges.
Tobina Kahn, Chairwoman of Kahn Estate Jewelers, stated that as the trading price of gold hit a new historical high of over $2,500 per ounce, she continues to see a steady stream of people coming to sell their broken and unwanted jewelry, further proving the difficulty of the economic situation.
In an interview, she said, "Inflation may come down, but prices are still going up, which means people still need money because their salaries aren't going to be very high."
Kahn made the remarks as the U.S. economy grew by 3.0% in the second quarter, exceeding expectations.
Meanwhile, the Federal Reserve's preferred inflation indicator, the core Personal Consumption Expenditures (PCE) price index, showed an annual growth rate of 2.5% on Friday.
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Kahn said, "Inflation is coming down, but the cost of living is continuously rising."
Kahn noted a trend in the market where elderly consumers are coming in to sell jewelry they don't want to pay for medical expenses.
She added that gold jewelry as an investment is doing what it should be doing, as prices remain high near historical highs.
She said, "These people are getting a lot of money from broken gold that they wouldn't necessarily think about if the prices weren't so high."
Kahn added that those who hope to supplement their income by selling broken and unwanted gold should not try to time the market.
She explained that waiting to sell at the peak at the current prices could lead to the frustration of missing out.
She said, "I think the price of gold will go up because inflation is far from being under control, but if you want to sell your gold, you shouldn't wait."
"I expect most consumers can easily find $1,000 in cash in their jewelry box right now," Kahn said.
Meanwhile, Kahn noted that some consumers she has spoken to are reluctant to sell because there is growing optimism that prices may reach $3,000 per ounce.
Kahn said that $3,000/ounce is a realistic target for gold and could be achieved in just a few months.
She said, "I think the price of gold will continue to rise because I don't think the economy will improve much, but I do think we will see higher volatility in the short term."
"When you need extra money, the price of gold can easily drop," Kahn warned.
Kahn's evidence aligns roughly with broader market views, as global consumers profit from the rising price of gold.
The World Gold Council noted in its quarterly Gold Demand Trends report that the gold recycling rate reached its highest level since 2012 in the first half of this year.
The World Gold Council said in its July report that recycled gold increased by 683.9 tons in the first half of the year.
"The largest contributor to the increase in recycling supply was Europe, which made a significant response in the second quarter after relatively flat numbers in the previous quarters.
The trigger seems to be price-related, with the gold price in euros exceeding 70 euros per gram at the beginning of April," analysts said.
Meanwhile, in North America, Canada is actually leading the market because gold prices broke through 3,000 Canadian dollars in the second quarter.
The World Gold Council stated, "As the U.S. economy continues to outperform most countries, there are fewer triggers for a significant increase in recycling volumes."