At Pantbanken Sverige’s office on Fridhemsplan in Stockholm, the number of customers wanting to value or pawn their gold items has increased significantly. Their lending is up 30 percent compared to January last year.
“I don’t understand it, it happened very quickly,” says Robin Lindqvist, the office manager.
Even though he has been working at the pawn shop for almost 20 years, the recent dramatic increase in value sometimes makes him count twice.
– You think a certain bracelet should be worth four thousand, and suddenly the same bracelet ends up at seven or eight. You think you miscalculated.
The past year has Gold prices rose dramatically, surpassing $5,000 an ounce for the first time ever last week. The price of silver has also risen – in percentage terms even more than the price of gold. The development has been described as both spectacular and alarming, and the underlying causes are closely linked to the uncertain world situation.
However, the curves that had been pointing straight up in recent weeks turned downward on Friday. Both gold and silver prices collapsed after Donald Trump nominated Kevin Warsh to be the new head of the Federal Reserve. The decline continued over the weekend after DN’s visit to the pawn shop.
Despite the sudden and sustained decline, both metals are still above levels at the beginning of the year, and in a year the price of gold has risen by more than 60 percent and the price of silver by almost 150.
Also the rise in the price of silver According to office manager Robin Lindqvist, this is noticeable in the pawn shop.
– Silver has also added more, although not as much as gold. I think it’s because there hasn’t been as much written about silver and the average person doesn’t know as much about it, he says.
He says the price boom in recent months has resulted in some customers losing their composure after having their gold items valued.
– You’ve read in the newspapers that it says $5,500 an ounce, but that doesn’t mean much to most people. That’s why many people are surprised that there is so much, he says and continues:
– For customers who have previously pawned something and now come back with the same item, we can suddenly lend a lot more money. Suddenly you can get SEK 2,000 more for the same bracelet.
There is a lot of speculation about this about whether the recent gold rush is a bubble and, if so, when it will burst. Although the price can fluctuate drastically within a few days, the pawn shop does not change its own prices according to every market movement, explains Robin Lindqvist.
– We are allowed to borrow at a certain level, and when it stabilizes a little, we can increase it. We take loans for such a long period of time. So who can say what it will look like in six months when we have to sell? It is a risk on our part how high we set the price.
Facts.Therefore, the price of gold has risen sharply
Central bank purchases: European central banks’ gold holdings have risen sharply in recent decades, which is seen as a key explanation for the price rise. In ten years, gold holdings have risen from ten percent of global foreign exchange reserves to more than a fifth today.
Geopolitical factors: A turbulent environment causes investors to turn away from stocks and currencies and invest more in gold, which drives up the price. Historically, gold has been a safe investment that can withstand times of war and crisis.
Double dollar effect: As the dollar weakens due to political uncertainty and interest rate cuts, investors are turning to other assets, including gold. Additionally, the price of gold is denominated in dollars, so a weak dollar leads to increased demand for gold from investors outside the United States.
Read more:
Four explanations for the gold rally
Carl Johan von Seth: The world is in gold fever – and that’s a bleak sign
