Spike in gold prices affects Grants Pass businesses

GRANTS PASS — The run-up in worldwide gold prices has been felt up and down Main Street America, such as in Grants Pass.

With gold fetching up to $1,000 an ounce, there are sellers.

"People are bringing in broken chains, old class rings, even old teeth," said Gary Burton of Burton's Rare Coins.

And in a mountainous region with a mining history, there are searchers.

Mike Higbee of Armadillo Mining Shop reports a rush on pans, sluices, dredges and metal detectors — "anything and everything related to going out and finding gold."

"Normally our season gets going in the middle of May, but we saw things heat up in the middle of January this year. Most people are thinking, 'Wow, I can have some fun and make some money too,' or 'I've been laid off from my construction job, and I can feed my family.' "

And, as usual, there are investors, in coins, bars, gold certificates, gold-oriented mutual funds and the like.

"It's the herd mentality. You see this in the stock market as well," said Brian Bayley, financial representative of John Hancock Financial Network. "The average person who doesn't do much investing sees these big moves and is trying to get in now."

Gold peaked at $875 an ounce in 1980, which would convert to at least twice as much as the current $1,000 in today's dollars.

Gold dipped well below $300 an ounce early this decade. Some analysts are saying gold could double again from the current price.

But market watchers are wary.

"It doesn't sound like a good time to be buying," said Rodger Jordan Jr. of LPL Financial, who doesn't deal in gold. "The horse has already left the barn. People need to be cautious. If there's nothing to hold the value up, it's going to correct itself. There are people who bought gold 25 to 30 years ago close to this all-time high who still haven't broken even."

For some people selling gold items, the boom has been a long time coming, Burton said.

"A lot of people bringing it in never thought they'd get their money back," he said.

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