NEW YORK, NY January 17, 2008 —It might be a good time to cash in your gold coins and jewelry. Gold prices set a record high this week, reaching above 900 dollars an ounce. It's a sign investors are losing faith in stocks, bonds and currencies, and they're hankering to put their money into something considered safe. WNYC's Lisa Chow checks in on one group that’s benefiting from the rise.

REPORTER: All across the city, pawnshop owners are closely monitoring the price.

ROSADO: I check three times a day.

KLEYNBERG: About every hour, every half an hour. all day. I watch the market all day.

REPORTER: More than 160 licensed pawnshops handle thousands of pieces of gold every day.

FIGUEROA: I've pawned this here like more than 20 times.

REPORTER: George Figueroa is a regular customer at Mr. Pawnbroker in the South Bronx, where the shops are greatest in number.

FIGUEROA: I use my jewelry as money, collateral. When I need to pay a bill and I don't have the cash, I put it here. Four month later, three months later, I come back and get it out. Wear it.

REPORTER: Through a bulletproof glass slot, Figueroa hands over a watch and two gold, diamond studded rings. He gets 250 dollars back.

FIGUEROA: They're safer here than they are anywhere else, even in my house. I'm always working. I'm never home. I don't have to worry about someone breaking in and stealing my jewelry. It's here.

REPORTER: And with transactions like these, pawnshops are perfectly positioned to take advantage of gold’s climb. They're buying gold on the cheap, often giving out loans that are 25 to 50 percent of gold's market value. The deal is they agree to hold the customer's item for four months, with a one month grace period. If the customer returns to pick it up, pawnshops get their loan back plus interest. If the customer doesn't pick it up within five months, the pawnshops can sell the gold. And in these past five months, gold prices have increased 35 percent, while the Dow Jones industrial average has fallen 3 percent. Lenny Kleynberg manages Bargain Pawnshop in downtown Brooklyn.

KLEYNBERG: Everybody in a pawnshop should be paying more money for gold because it’s more expensive and you can get more money for it.

REPORTER: But, Kleynberg says, paying more doesn't always benefit those pawning their gold.

KLEYNBERG: Initially, you ask that person, would you like more money, and of course, the person always says yes. It's natural for a person to say yes, give me more money. So you give that person more money once, twice. Sometimes they come back. Sometimes they don't.

REPORTER: As pawnshops are loaning out more money, it has become harder for customers to pay it back. In New York, pawnshops can charge up to 4 percent a month. That might not sound like a lot but that’s monthly interest, not annual interest. On top of that, there are service fees and vault charges. Kleynberg says half his customers come back for their gold, half leave it. And the number leaving their gold has grown.

KLEYNBERG: Today I'll give you a lot of money for it.

REPORTER: I hand over my necklace just to see how much I can get. It's a 22 karat gold chain with a sapphire pendent and an intricate lock.

KLEYNBERG: It's 22 karat gold. Basically on a chain like this we'll just give by the weight of the gold, whatever the scrap price is minus a certain percent of it, and hopefully we won't lose within the five months that we're holding it for you. So you'll get about 65 dollars.

REPORTER: The necklace cost 220 dollars a year ago, which means it should be worth more now.

KLEYNBERG: To you, look at my beautifully designed lock. To me it's just a lock. That’s the difference between a customer buying it and someone in the business who sees it like a piece of gold.

REPORTER: Kleynberg has to lowball me. He’s hedging against the biggest risk in this business -- that in the five months he has to hold on to the piece, gold can fall as quickly as it rose. But the pawnshop manager in the South Bronx, Radames Rosado, believes prices are still going up.

ROSADO: I think in the next 6 months, I think we'll see it go up past $1,000. That's my theory.

REPORTER: So maybe I should hold on to my necklace. One day soon, it could break $100. For WNYC, I'm Lisa Chow.