I am now starting to see advertisements from pawn shops suggesting that you pawn your gold or pawn your silver instead of selling it.

The strategy behind this is that if you pawn your gold or pawn your silver you will still own it should prices rise so that you can sell it later for a higher price. Well, that's basically a good idea. But what happens if you need money now, and you pawn your gold or silver only to find out that prices decline sharply a month or three months from now?

The other factor you have to consider is the cost of the loan you are getting. Pawn shops can charge very high interest rates -- and these rates are legal. Not all pawn shops do charge high interest rates, so you have to shop around. But the point is that if you pawn your gold or pawn your silver and prices remain flat for the next several months and then you decide to sell your gold or silver you will have lost money on the interest you paid the pawn shop.

And there is another factor to consider when you pawn gold or silver or anything-- what if you don't have the money to pay back the loan and redeem the item you pawned? Then you could lose the item.

So, if you are pawning gold or silver because you need the money, ask yourself if you will be able to repay the loan later or you might as well just sell it now?

What are your thoughts about pawning an item when you need cash whether it's gold or silver or your favorite six-string?