Gold has risen more than 20%. Is it time to pawn or sell jewelry?

The recent rise in gold prices has opened up an opportunity for those who own jewelry or used gold, even in poor condition, and are in need of cash or simply want to exchange it for a more appealing piece. This year alone, the price of the precious metal has risen more than 20% in Europe, when exchanged in euros. This is largely due to COVID-19, which has derailed financial markets. Uncertainty in the oil market also contributed.

One way to get a good price for your pieces is to sell them at an establishment authorized by the National Mint Press (INCM), under the direction of an Official Appraiser licensed by INCM (gold sales). Beware of jewelry stores that are often not authorized to buy gold, resulting in both sellers and buyers being investigated by authorities.

But there is another option for those who don't want to lose gold or silver pieces, which may have sentimental value, which is pawning, explained later.

Gold rose due to the devaluation of the dollar

This recent rise in the gold price in euros has created an opportunity to get rid of your jewelry, in some cases 20% above the values achieved less than a year ago.

This appreciation was achieved thanks to the devaluation of the euro against the dollar, the currency in which pure gold is quoted on stock markets. This was at least one of the reasons. The other was the pandemic we're currently experiencing, which creates uncertainty about the economic future. When this happens, investors take refuge in gold, considered a safe haven asset during economic crises.

Pawning is an alternative to getting money without selling your gold

Those who need cash immediately and don't want to lose jewelry or gold pieces because they have sentimental value or for any other reason can always take out a pawn. This involves borrowing money based on the value of the pieces, paying a modest monthly installment with lower interest rates than a personal loan granted by banks, for example. It also has the advantage of being able to be done immediately, without the typical bureaucracy required by banks.

It's an activity regulated by INCM and monitored by ASAE. Not to be confused with VOC (Sale with Option to Call), advertised by some companies, which are illegal because they are unregulated and can charge exorbitant interest rates.

Interest rates are so low that some people even pawn their assets just to keep them safe, as all assets are kept in bank safes.

Informal market presents risks

In Portugal, there are establishments, many of them traditional goldsmiths, that purchase gold without proper authorization. Some of them don't even register these purchases, which can lead to serious legal problems.

These stores generally offer more attractive prices than the market average. But this shot in the dark can be quite expensive, not only for the buyer but also for the seller.

Experts recommend that you always look for reputable stores with over 10 years in the market and under the direction of Official Appraisers licensed by the Casa da Moeda (INCM) and with all licenses updated and up to date.

If you want to pledge, you can ask all your questions here .

If you want to sell gold, clarify your doubts at this link.