Want to put a finger on the pulse of the economy? Look to the price of gold.
The metal hit a new high of $1119 per ounce on Wednesday as wary investors ran to sink their savings into a stock even their grandmothers could love. Gold often becomes a hot commodity when confidence in the market thins, and while the dollar has fallen, the price of gold has risen 26 percent since last November.
In Sunset Park, however, it’s the dip in gold purchases that tells of tough times.
Customers buy “just for what they need” said Gus Guzman, the owner of Martha Jewelry Inc. on Fifth Avenue. “They buy for confirmations, baptisms, not for themselves.”
Sunset Park has many Latino residents who gift the traditional gold jewelry at communions and quinceañeras, the coming of age ceremony for 15-year-old girls. Families stretch for special occasions, but no longer buy the extras that once kept Guzman’s business swift.
Guzman said business is down by at least a quarter. Other jewelery shops along the Avenue site losses of up to 60 percent. Nearly everyone says it in October 2008–“right after Lehman Brothers,” said Guzman. The infamous investment bank collapsed on September 15 of last year.
The economic slump has hit New York City’s Latinos particularly hard. In a study by the Community Service Society, four in ten low-income Latinos had either lost their jobs or had their hours, tips or wages cut this year. Seventy percent had savings of less than $500.
With unexpected bills and less money coming in, some are taking up the offer advertised in the window of nearly every jewelry shop on 5th Avenue–“WE BUY GOLD.” The stores hope that by picking up pieces in the neighborhood they will make it through the slump.
On a recent afternoon, Guzman waited to the side while a couple lingered over a small gold crucifix, debating in Spanish whether to make the purchase. The doorbell chimed, and he buzzed a customer through the security door.
She greeted Guzman by name, handed over a gold ring, and asked “How much can I get for this?”