They say that diamonds are a girl’s best friend. However, that may not be entirely true. Diamonds are starting to be passed over for the new BFF, gold. With the market being unstable and people turning more and more to pawn shops, the better choice to pawn, is gold.
Why is it the case that gold has shouldered out the forever diamond? Though diamonds are still a good investment, there is not as much demand for them as in the past. The market has been flooded and though the demand changes throughout the year, we saw a drop in the value of diamonds during the second quarter of 2011. Another factor is that people view diamonds as a luxury purchase. In today’s tough economy, there is not a lot of disposable income for luxury items. Especially not expensive luxury items.
Gold, on the other hand, has risen to all time highs this year, with prices going up over 27.4%. There is a liquid market for gold and it is traded on a daily basis. Because of the unstable global economy, gold is the much better choice for investors. Though its demand fluctuates as well, it can be liquidated on a daily basis. Since this is the case, pawn shops are offering more for gold.
Any time someone looks to pawning an item for cash, they obviously want to get the most money. Knowing the market is one way to ensure that you are doing this!