Gold exchange outlet reports residents trading in their gold to pay bills
Residents strapped for cash are increasingly trading in their gold for money to pay bills and even mortgage payments due to the economic crunch.
One company has paid out $3 million alone as Bermuda's gold exchange outlets take on a steady upsurge in business since the recession.
At Gold Standard, partner Matt Mello said: “We have definitely seen steady growth in the demand for our precious metals buying service. In fact we're moving to a larger, more central location which we hope to complete in May.
He attributes the growth in business in part to the rapid rise in gold prices, but he said economic concerns have also played a part.
“To date, we have been able to infuse over $3 million back into the hands of Bermudians, many of whom simply recognised the usefulness of having cash for vacations or other goods.”
But others have used the service for more pressing needs. Mr Mello said those needs range “from meeting mortgage payments to paying for medical emergencies.”
Business has been so good that Gold Standard has expanded their service. In addition to gold they also buy silver, platinum and palladium and are looking to expand to include other precious items.
While most are trading in gold treasures to pay bills is the number one motivating factor, gold rings and necklaces are still the most popular items being turned in for cash. The second most popular item is engagement rings.
Bermuda Gold Exchange has been in business for just over a year. Co-owner James Gilbert said he decided to get the jump on business before the price of gold skyrocketed.
“We were the first to become the first local limited liability company to buy and sell gold in Bermuda. We started out with a drop box at Gorham's, but it was drawing the attention of people of a questionable nature.”
Overall Mr Gilbert said most people are using the jewellery trade in to pay bills. “Gold went down to nearly $1,640 last August after it went as high as $1,999, now its $1,773 an ounce.
“Now's a good time to either buy or sell gold, and we've been pretty steady lately.
“We did have a few instances where the items being turned in were questionable.”
The most popular jewellery being turned in by women, according to Mr Gilbert, continues to be engagement rings from relationships that have gone sour.
“Most women who come in want to get rid of the memories of a bad relationship. Some just want to know how much the ring is worth.”
But he stressed that Bermuda Gold Exchange works closely with the Bermuda Police Service to avoid receiving stolen goods.
“We just had a case where a young man came in with jewellery a bundle of gold. Another customer came in the day after and identified the gold as stolen property.
“The police came and the same guy who sold the gold to us was spotted on his way back here to sell more gold.
“We had paid him $300, and we returned the gold to police for the investigation at our loss.”
When asked by
The Royal Gazette, how he determines which exchange deals are above board he replied: “We've taken video and pictures of all transactions from the start.
“We keep a log so we can keep a record of all transactions and we have given information when asked by police and even some clients.
“There's a big difference between little old ladies coming in with $1,500 worth of gold jewellery compared to someone coming in with an assortment of jewellery worth much more.”
While customers are not required to sign paperwork, he said: “We take photo ID's and match it with the items that come in with the customer, the police can track the information.”
Most clients come in to trade gold to pay bills, and he has had jewellery worth quite a bit of money in one trade-in.
“I've had someone come in with jewellery we valued at $20,000. We had to pay them in two instalments, money laundering laws only allow $15,000 as the maximum amount allowed for a single transaction on any given day to one individual.
“We've tried to work hand in hand with the police, and we've had many meetings with them to discuss the issue of stolen goods.”
Mr Mello echoed his remarks and said Gold Standard initiated talks with the Bermuda Police Service before they even opened for business.
“And we have worked closely with a number of key detectives to establish a framework for our mutual concern regarding stolen goods. We require ID's and have CCTV surveillance to supplement police efforts to identify persons of interest.
“As a result we have been able to assist in the arrest and conviction of several individuals attempting to abuse our service, representing thousands of dollars in recovered jewellery.
“Gold Standard further took the unprecedented step of registering and training with the Bermuda Financial Intelligence Agency.
“We have been in discussions with the Bermuda Monetary Authority regarding the regulation of our industry.”