Times Online:

For the first time in nearly 30 years, there are more people selling gold jewellery as scrap than buying new items. The high price of gold combined with the economic downturn has encouraged people to raise extra cash by selling everything from family heirlooms to tooth fillings.

GFMS, the leading precious metals analyst, said yesterday that an estimated 500 tonnes of gold had been sold as scrap during the first three months of this year.

Demand for new jewellery had nearly halved to 420 tonnes, the first time since 1980 that more scrap was being sold than customers were buying new rings and bracelets. GFMS added that scrap sales had hit a record level last year, rising 27 per cent to 958 tonnes.

Philip Klapwijk, chairman of GFMS, said: “We have seen scrap sales rise substantially already this year and I think we are heading for another record year.” Goldsmiths have reported a huge surge in business as people look to trade in old gold jewellery for cash. They have also benefited from an increase in demand for investment gold – primarily coins and bullion.

My comment: This article is mostly talking about jewelry and scrap. believe me there are plenty of people and countries that would love to sell some of their paper dollars and buy some gold. The recent pullback in gold is technical and has been exacerbated by the annual IMF gold sale rumor. In the end increased money printing around the world will lead to higher gold prices.

John Polomny
The Real Deal