While stocks and physical gold investments remain solid, used gold buying businesses in Italy are experiencing a slump since the first quarter of 2014.
Used gold brokerage is one of the businesses in Italy that continued to prosper during the peak of the Euro zone crisis. However, while the Euro zone crisis is far from over, the business has lost its edge due to a number of reasons. Firstly, the competition between gold brokerage businesses became stiffer as their numbers doubled in just a few years after the peak. Secondly, Italians who are willing to sell their gold jewelry declined rapidly. This is due to gold prices’ sharp depreciation that happened last year. In April 2013, spot gold prices plunged almost 15%, making used gold brokerages lose hundreds of thousands in just a week.
Gold brokerage firms cuts down on losses
Because of the quick decline in the interest in selling gold jewelries, many brokerage owners have no choice but to look for ways on how to save their business. According to the International Business Times, Orocash is being looked at by almost-bankrupt gold brokerage firms as a company that they can merge with. Orocash is an established gold buying company and has more than 500 shops around the world.
Some who refuse to give up sole ownership of their business beef up their marketing antics. Some shops offer fashionable jewelry and sell it at 40% off their original value. Others that are desperate for attention throw in freebies that aren’t related to the gold trade at all like “Free movie tickets for every 5 ounces of gold that customers sell.”
Gold brokerage firms in Italy may be experiencing a slump now. However, precious metals experts say that the owners are right in not selling their business. After all, gold’s volatility is expected and those who have stuck with its erratic price movements over the years have been rewarded with returns when the time has been right to sell.
Today, gold prices are slowly getting back to the $1,330 mark. This is good news after its prices went down to around $1,200 – $1,250 at the start of 2014. To keep track of the precious yellow metal’s price movements and to see today’s gold price, investors may visit Bullion Vault’s live price chart.