No jewelry store preserves so many relics as the building where José enters in one of the corners of the Plaza de las Descalzas, in the center of Madrid. The pensioner from Zaragoza hides behind gold earrings with specific pieces of diamonds, the photo of which he carries on a piece of paper that he keeps in his pocket. He knows them well because they have belonged to his family since 1850, estimates José, who prefers not to reveal his surname. “They’ve been ours for seven or eight generations,” he says. The pensioner is not in a shop, but at Monte de Piedad in Madrid, the largest and oldest jewelry pawnshop in operation in Spain, with more than 300 years of history.
José left the earrings there six months ago as collateral in exchange for a loan. He immediately needed 3,600 euros to pay the last installment of the mortgage on his apartment, where he lives in Madrid. At 72 he will own his home. But the trip to Monte de Piedad in Madrid turned out to be better than expected. That non-profit organization granted him a credit of 4,000 euros. “I’ll take an extra dollar,” he jokes about the additional 400.
Now that the mortgage has been paid off, José wants to recover the family jewel. However, he still doesn’t have the money to buy it and is content with taking some cufflinks that he had previously pawned. Customers of Monte de Piedad in Madrid have one year to repay the loan, but it is possible to renew it indefinitely in exchange for interest payments. Otherwise the jewels end up at auction.
The granting of loans with jewelery collateral increased again in 2025. Madrid’s Monte de Piedad alone granted loans worth 40.7 million euros between January and October, according to data provided by the institution to this newspaper. “These are figures that have not been reached since the real estate crisis,” says Santiago Gil, the current director of the institute, with memories of when he started in the sector, 12 years ago.
José’s surprise is not a story of benevolence on the part of this pawn shop. The pensioner did not benefit from the charity of the institution, but from the dynamics of the market: the granting of loans and the number of pawn operations went hand in hand with the increase in the price of gold. The yellow metal has reached historic highs in the last two years thanks to increased investor interest in safe haven assets to overcome moments of uncertainty. It rose nearly 30% in 2024, between the U.S. election and Israel’s invasion of Gaza. With Donald Trump’s tariff war, gold has accumulated an appreciation of more than 60% this year.
Him rally registered on the New York and London metal exchanges, it dictated the pace of the pawns in the Plaza de las Descalzas, a small square surrounded by neoclassical buildings and where very few cars circulate. Credit extended by Madrid’s Monte de Piedad increased 15% in the first ten months of last year and skyrocketed 37% in the same period in 2025. “We have never seen such a powerful rally in gold and clients know it,” Gil says. This awareness is reflected at the entity’s doors where a passerby jokes with the four itinerant appraisers who, with their “buy gold” vests, stand guard: “I don’t want to sell gold, I want to buy.”
The number of pawnbrokers at Madrid’s Monte de Piedad increased by 20% in the first ten months of the year, to 43,000. The average loan amount is around 800 euros. A 1,000 euro necklace to cover the month’s purchases, a 300 euro bracelet to pay the electricity bill or a 200 euro ring to buy food. These are some of the stories told by borrowers.
Most of those who pawn jewelry in Spain are people in financial difficulty. “It is a means of financing for the most vulnerable people for the simple fact that you only need the guarantee of your jewels. We don’t ask for a notary or anything else. You go with your jewels and you get a loan with them,” says Ramón Alba, president of the Spanish Association of Montes de Piedad (Presea). Alba predicts that the volume of jewelry pawn receivables across the country will reach 200 million by the end of the year, 20% more than last year.
Not only new borrowers, like José, have benefited from the rise in gold. Daniel has already been busy for two years with eight jewels, including necklaces, rings and earrings, at the Monte de Piedad in Madrid. Initially they had granted him 1,000 euros of credit. By renewing the loan this week, he was able to adjust it to the rise in gold and leaves with around 100 additional euros.
“It’s a little more, though not much,” Daniel agrees. This 45-year-old Madrilenian, who does not want to reveal his surname, started pawning after becoming unemployed and continues to do so until he can return to work. “Upward rolling is great for covering a specific situation, but perhaps a client doesn’t want to go into further debt,” Gil considers.
Daniel had no alternatives, but the debt worries him. “I don’t want to lose my jewels. I bought them myself,” she declares. Defaults have remained virtually unchanged this year: they represent around 2% of total loans in Spain, Presea estimates, below the 3% default rate of Spanish banks, according to the latest data from the Bank of Spain.
The Monte de Piedad in Madrid was created in 1702 to combat usury, as commemorated by the statue of its founder, the Teruel priest Francisco Piquer, located on the side facing the Plaza de las Descalzas. It was followed by around twenty other montes de pieta across the country, of which only nine remain. Originally there were savings banks, to which they were subsequently integrated.
The one in Madrid merged with CajaMadrid in 1869, when José’s earrings had just arrived to his family. After Bankia (the entity resulting from the merger of several savings banks) was on the verge of collapse and was nationalized by the government in 2012, Monte de Piedad de Madrid became an independent foundation. Other mountains have followed in their footsteps while some are still standing still associated with entities such as CaixaBank or Ibercaja.
“The savings banks kept us hidden. In the last ten years we have advertised more”, celebrates Alba. Thus, he adds, the businesses of the montes de pieta in Spain depend less and less on crises. “We are no longer going down as before in times of greater stability,” says the president of Presea. While Spain’s economy is barreling ahead – the fastest growing in the EU – the only thing missing is for people like José and Daniel to take notice. At that time, they are counting on the rise of gold.
