How record-high gold prices impact Long Island

Gold prices surged to a record high early Friday, surpassing $3,000 per ounce for the first time, as investors sought stability amid ongoing global instability, trade tensions and market fluctuations.

“The official high today was about $3,005,” said Mike McGlone, senior commodity strategist at Bloomberg Intelligence. “It’s reached a significant milestone.”

Some Long Island gold buyers and pawnbrokers had expected prices to reach this milestone, but not until much later in the year.

Here’s what you need to know about this historic moment and how it affects Long Island.

Why is the price of gold climbing?

Economic uncertainty — driven by inflation, the U.S.-China trade war and President Donald Trump’s tariff policies — has fueled gold’s rise, experts said. The war in Ukraine and other geopolitical pressures have also contributed to investors turning to gold as a hedge against volatility. Historically, gold has been seen as a safe hedge against unpredictable market forces, industry analysts said. 

Gold’s current rally follows one that started several years ago, accelerating after Feb. 4, 2022, when Chinese leader Xi Jinping and Russian President Vladimir Putin declared their strategic partnership amid tensions over Ukraine and Taiwan, McGlone said. Since then, gold prices have surged 65%, outpacing the S&P 500’s gain of less than 30%, he said. 

Danling Jiang, a Stony Brook University professor of finance, said that tariffs remain a major area of disruption, creating a greater degree of uncertainty that means central banks worldwide, as well as investors, “are going to fly to safety,” which gold represents.

How does the rising price of gold affect Long Island?

Rising gold prices have led to higher cash prices for consumers, increased loan rates for those borrowing against their gold items at pawnbrokers, and an uptick in Islanders looking to have their gold appraised, local pawn shops, gold buyers and jewelry store owners told Newsday late last month. That’s when the price of gold hit $2,955 per ounce. 

David Gordon, owner of Whitman Coin & Jewelry Inc. in Melville, said in February that the gold surge, which “took off like a rocket ship in the last few months,” increased the number of customers looking to sell items. Although prices have been accelerating since the pandemic, Gordon said, his family-owned jewelry shop and collateral loan business has seen more Islanders looking to cash in.

“We’ve seen an uptick in people selling their own gold because it’s been at an all-time historic high,” Gordon said.

Paul Villa, whose family owns Johanna’s Jewelry in Westbury, a buyer and seller of gold chains and other jewelry, said in February that news of the soaring prices had made consumers shrewd in negotiations over the value of their jewelry and more willing to shop around for the highest bidder among gold buyers.

“There’s a bit of a bidding war going on," Villa said.

Will gold keep surging? How high will it go?

How much higher gold's price will climb remains uncertain, but with no sign of economic pressures easing, experts predict prices will continue rising.

Jiang of Stony Brook said a lot remains to be seen. “You never know what’s going to happen in April,” Jiang said. “Maybe you’ll see $3,500.”

Mariano Torras, an economics professor at Adelphi University and chair of its Finance and Economics Department, said the underlying issues fueling gold’s run are connected to the global economy moving away from the dollar as its default currency. 

“For a while, central banks across the world have been loading up on gold to the extent that they can because they are gradually substituting out the dollar,” Torras said. “The dollar’s dominance is not what it once was.”