Hock Heaven

With gold up and the economy down, more Americans are mining dresser drawers and jewelry boxes for broken chains and old lockets to convert to cash. Gold has spiked as much as 50% in the past 12 months, and pawnshops are seeing a surge in business. At Cash America International, the nation’s largest publicly traded chain of pawnbrokers, with some 500 outlets, profits from bulk sales of gold jewelry to refiners amounted to nearly $38 million in 2007, up 59% from the previous year.

But pawnshops are vulnerable to swings in commodity prices. Gold soared to an all-time high of just under $1,003 an ounce Mar. 14, but has since dropped to $934. Cash America, based in Fort Worth, uses hedges to cushion the impact of sudden price dives, but independent shops are more exposed. “You tell me what the market is going to do, and we’ll both make money,” says Fran Bishop, owner of Dollar Pawn in Haleyville, Ala. –Ben Levisohn