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SAN FRANCISCO (AP) — For gold sellers on eBay, the recent stock
market turmoil has been a boon for business. Gold and silver sales
on eBay had already been rising steadily over the past several
years – so much so that eBay Inc. created a special area in May to
make it easier for buyers to find sellers.
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Now, activity on that part of the site, the Bullion Center, is
intensifying as consumers unnerved by the economic uncertainty
flock to gold in hopes it will be a stable investment.
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“When people are coming down to the question, `Do they want to have
cash in the bank or gold in their hands?’ the answer is they’d
rather have gold or silver,” said Jacob Chandler, CEO of Great
Southern Coins, the largest seller of precious metals on
eBay.
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The stock market just ended one of its most volatile weeks in
years, prompted in part by a downgrade in the nation’s credit
rating and fears of another recession. The Dow Jones industrial
average fell nearly 6 percent on Monday, its worst one-day drop
since December 2008. Then the index rose Tuesday, fell Wednesday
and rose Thursday and Friday to end the week 2 percent lower than a
week ago.
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Through most of last week, the average selling price increased for
gold bullion – bars or coins stamped with their weight and level of
purity.
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According to the most recent data available from eBay, sales of
1-ounce gold American Eagle coins and 1-ounce gold Pamp Suisse bars
rose steadily from Aug. 5 to Wednesday, before dipping slightly on
Thursday.
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On Aug. 5, when Standard & Poor’s lowered the nation’s credit
rating, American Eagle coins were selling for an average of $1,800
among eBay’s featured sellers. The average price of the coins,
produced by the U.S. Mint, rose more than 8 percent to $1,952 on
Wednesday, before dropping to $1,915 on Thursday.
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The Pamp Suisse brand of gold bars sold for an average of $1,787 on
Aug. 5 and climbed nearly 8 percent to $1,927 by Wednesday. On
Thursday, the bars dropped slightly to $1,890.
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Even before last week’s market turbulence, investors were cautious
because economic signals in the U.S. and overseas pointed toward
trouble.
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The Dow index fell 6 percent in the week ending Aug. 6. That week,
the number of gold buyers on eBay rose 11 percent compared with the
year’s weekly average. The number of gold sellers rose 14 percent.
EBay would not provide the total number of buyers and
sellers.
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“With all the turmoil in the markets, this is seen as a way to
diversify,” said Anthony Delvecchio, eBay’s vice president of
business management and strategy for eBay’s North America
business.
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EBay, which is based in San Jose, Calif., does not impose minimum
purchase amounts for bullion. Sellers offer gold both through
auctions and “Buy It Now” fixed-price sales.
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The increased popularity of gold on eBay echoes what’s happening in
the broader gold market, where prices have spiked during the past
two years.
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Gold traded at about $900 per ounce in the summer of 2008, before
the financial crisis unfolded that year. It passed $1,600 in late
May and briefly rose above $1,800 for the first time on Wednesday
before pulling back to $1,784. On Friday, gold fell to $1,740.60
per ounce, still nearly twice the summer 2008 prices.
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Great Southern Coins has benefited from this uptick. Chandler said
the company is selling more gold lately, and its silver sales
remain strong, too. Chandler estimated his business has nearly
quadrupled in the past 45 days, and he said it appeared to be up
about five or six times during the past week, with most of this
growth coming from sales on eBay.
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Daniel Hirsch, a New York-based statistician who recently purchased
more than a dozen gold coins on eBay from Great Southern Coins,
said he started buying gold less than a year ago in an effort to
expand his investment portfolio.
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“It’s kind of a safe haven and a hedge against low interest rates,”
he said.
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