‘Lineups outside the door’ for Winnipeg gold retailers as prices surge

Winnipeg gold retailers are unusually busy as customers sell off or invest in gold amid rising prices, but businesses are also wrestling with ways to make their goods more attainable. 

“It is a roller-coaster,” said Paul Szurlej, co-owner of Golden Hand Jewellery in Winnipeg.

“People are selling, people are trading, people are even pawning if they’re in a pinch and they need money.” 

The market price of gold closed at about $4,600 US per troy ounce — the measurement used when weighing precious metals — on Friday, Paul said. 

Even though it dipped slightly before last week, the price for the commodity has progressively increased in the last six months.

After years of gradual growth, gold hit a record high in October, peaking above $4,000 US per troy ounce. The commodity has mostly surged in value since then, with a five per cent increase in January alone, the Associated Press reported on Friday.

The soaring prices mean the value of products at Golden Hand Jewellery has also grown — but that has come with challenges, including finding alternatives to offer affordable options to buying customers. 

“It’s very hard for us to keep on engaging customers to come in and feel that they’re getting amazing deals,” said Golden Hand Jewellery co-owner Dorota Szurlej. 

The business is trying to increase sales by offering some gold products on clearance with hefty discounts, while new items that resemble the precious metal but are actually made of yellow silver can be sold at a fraction of the price. 

Appealing to younger audiences on social media, bringing in NHL licensed jewellery and original designs are also some ways they’re keeping sales going, Dorota Szurlej said. 

“We are also being more creative when people come in to sell or pawn their gold, so how can we reuse that gold?… We can either make memory pendants or remake customers’ gold into new sentimental items,” she said.

‘Safe haven’

University of Manitoba Prof. Barry Prentice said the value of the precious metal is rising because of demand.

“It’s worth whatever people are willing to pay for it, that’s essentially what it comes down to,” he said. 

The recent growth comes as large government institutions move their economic reserves away from the U.S. dollar and into gold, he said.

“Governments have less confidence in the U.S. and, in some cases, like China, very much would like to reduce their exposure to the U.S. dollar,” he said. 

“Currency markets, I think, are [also] in a certain amount of disarray.… We see these cryptocurrencies now coming along. We see a lot of inflation, and I think that uncertainty is pushing some of this.”

People selling jewellery are watching, he said. 

“They’ve looked at this and said, ‘My goodness, the prices kept going up and up and up.’ It’s the old waiting for the ultimate dollar,” Prentice said.

Winnipeg’s Gatewest Coin has had more customers bring in scrap gold for sale, said Jasmine Allen, the store’s vice-president. 

But there have also been more clients interested in purchasing gold not necessarily to wear but as an investment. 

“There’s so much geopolitical instability. Precious metals are typically used as a safe haven,” Allen said. 

While she has worked through other peaks in the price of gold, including in 2012 and during the COVID-19 pandemic, Allen said she has seen nothing like this before.

“It’s not uncommon for us to right now have lineups out the door,” she said. 

With business booming, they redid the storefront to have more staff and computers to help customers. 

“On the average day, we were used to seeing between 10 and 15 [customers]. Current times, especially over the last couple of months, we’re seeing 30 to 40,” Allen said. 

It is difficult to say how much the price of gold will fluctuate in the short term, and that’s exacerbated by the fact the value of the precious metal in Canada is affected by the exchange rate between the U.S. and Canadian dollars. 

For now, customers are leaving the store with surprises in hand, Allen said. 

“Coming in, you know, they’re expecting maybe a few hundred dollars, and they’re leaving with maybe $800,” Allen said. “It’s not unusual for us to have people come back a week or two in a row, saying, ‘I found more.'”