New gold rush as price soars

A gold rush is starting in the West Midlands, with jewellers reporting a dramatic increase in customers selling off their valuables to raise quick money.

The value of gold is currently at record levels, and shops are predicting scenes similar to the 1980s when surging prices led to queues in the streets as people rushed to sell.

An ounce of 22 carat gold, which was selling for £155 five months ago, has today risen to £286.

And with warnings Britain is slipping into recession, people are again turning to gold as a way to raise money quickly.

Jeweller Rex Johnson says he has seen more people coming into his Dudley shop to sell rings, watches and bracelets.

And David Nicholls, of Millers Jewellers in Wolverhampton's Wulfrun Centre said: "We have seen an increase in people coming in to sell jewellery. The last time prices were as high as this was in 1983."

Pawn brokers in the region last month also revealed trade had jumped 20 per cent as people become affected by rising prices and mortgage hikes.

Gold has always been seen as a safe haven for investors, particularly in times of stock market turmoil.

Peter Bannister, investment director at Wolverhampton-based financial advisers Newell Palmer and Associates, said he believed the price of gold had probably peaked, as people in India – one of the biggest buyers of the metal – were now selling it off.

"I feel it will probably go to the $1,000 an ounce mark or around £500 for solid 24 carat gold this year and 22 carat gold will go up accordingly. It tends to be used as a hedge against inflation and there is some inflation around the world.

"They cannot mine it quickly enough to cope with demand at the moment, and this has been creating a run on the price. But I think it will now take a bit of a breather, having accelerated so much in the past year."