Bermudians have been rushing to cash in on their gold jewellery and coins with one trader buying more than $750,000 in items since it launched in late February.
Gold Standard Bermuda, which is run by business partners Jonathan Hitchcock and Matthew Mello and operates out of M&M International Ltd in Church Street, has proved to be a big hit with residents, taking in jewellery, coins and other items at a rate of about 1.5 kilogrammes a week recently.
But the pair don’t see this trend continuing forever, given Bermuda’s size. And they believe most of their customers just want to cash in on their old jewellery which they will never use again, rather than out of desperation as a result of the recession.
Having both worked in retail, the duo sensed the global recessionary mood was set to continue early this year, pushing up the price of gold as more investors turned to a safe option.
“Our experience with gold and commodities was limited at best, so we pored over all the information we could get our hands on and contacted industry veterans overseas we hounded them mercilessly for information before determining we had done our due diligence and making the plunge into gold buying,” said Mr Hitchcock.
Starting out about five months ago, by appointment, they tested and assessed the gold items people brought in by carat and weight to calculate the pure gold content and made the seller an offer based on current gold prices issued by the London Bullion Market Association and it wasn’t long before they launched a walk-in service and took on another tester.
“We pay up to 90 percent of the spot value depending on the type of item being sold,” explained Mr Hitchcock. “It’s really based on the risk we’re taking on a purchase; there’s a lot less risk associated with buying an investment grade gold product coins, bullion, etc versus buying a generic piece of jewellery.
“Even with our now considerable experience, we still get caught out on some pieces and even small mistakes can be extremely expensive.”
At the time of going to press, Messrs Hitchcock and Mello expect to have purchased more than $750,000 in gold material, representing several thousand transactions.
They take everything from rings, bracelets, chains and earrings to watches, coins, dental gold, pendants and charms, paying out up to $100 for customer referrals based on how much they buy from the new prospects.
Gold Standard Bermuda also rewards those people who help them reach the $100,000, $600,000, $700,000, $800,000 and $900,000 payment marks with $1,250, with a bonus $5,000 for the customer who takes the figure above $1 million.
Meanwhile the company will also be running a prize draw for a 43-inch Samsung television with everyone who has a transaction worth $200 being entered. Every charity that registers with Gold Standard Bermuda is eligible for a 10 percent bonus for every purchase made where it is referred by the customer.
“Our purchasing volume has definitely increased by several orders of magnitude since we began, though we’re only looking at a five-month sample,” said Mr Hitchcock. “I think the vast majority of people we deal with just see more utility in having cash than some odd bits of jewellery they know they’ll never wear again.
“It’s hard to imagine that the recession isn’t at least some of the motivational subtext, but we’re not seeing panic or desperation from our customers at this point (and hoping we never do).”
Gold Standard Bermuda is open from Monday to Friday between 9am and 5pm.
For more information contact 537-2274 or e-mail purchasing[AT]goldstandardbermuda.com
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