MONDAY, MARCH 3, 2008
Gold Price Hits Record; Jewelry Stores Scramble to Keep Up
Gold hit an all-time high of $991 an ounce today,
according to MarketWatch.
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As the price of gold and other metals has soared lately, some jewelry stores have been adjusting prices daily.
Here's a story from the UK's
Financial Times.
The story makes the point that people might need to get their own jewelry appraised to update insurance policies.
Use this online calculator to figure out how much your jewelry is worth.
But wait a second.
A 2006 USA Today story points out that the cost of the metals really isn't the biggest factor in the price of jewelry. Back then the paper reported:
Gold makes up only about 25 percent of the price of a piece of jewelry, notes Whitney Sielaff, editorial director of National Jeweler magazine. The rest comes from designer and overhead costs.
This sounds a little like the gasoline business to me. The price of crude oil is just one factor in the price of gasoline, but when the price of oil rises, boy does the price of gasoline hike up overnight! And then -- surprise -- the oil companies turn in record profits quarter after quarter.
So could it be that jewelry stores are using the cost of metals to jack up prices or put the hard sell on wedding rings around the wedding season?
The (North Andover, Mass.) Eagle-Tribune reports that the price of gold and the soft economy has been crushing to the jewelry business. Small stores are under financial pressure because to consumers, "gold is not something you need."
You may have seen that Zale Corp. recently announced that
it will cut 200 jobs and close 105 stores this year.
And then there is
this other interesting story from the
International Herald Tribune. Gold is a traditional Korean gift, but this year, tradition may be threatened by rising prices:
Gold is the traditional Korean gift to wish a baby good health and fortune in life, but with the world price of gold soaring to more than twice the level of just three years ago, that custom is breaking down. Guests at first birthday parties are resorting to alternatives. Some parents who do receive gold in their baby's name are even reselling it as soon as they can.
Gold has been a marker of many life passages in South Korea. Gifts of gold jewelry and watches used to be almost obligatory at weddings. Companies often awarded their employees with gold medals and gave them gold key chains when they retired. It was assumed that gold could be turned into cash in case of emergency.
What a great way to draw your community together by telling them about other cultural values.
The story continues:
According to the Korea Jewelry Association, sales of baby rings are down by half since the typical cost rose above 100,000 won. ...
Gold jewelers have been trying to lure customers with lightweight baby necklaces or bracelets with bells -- supposed to prevent a baby from going missing.
And several jewelers say that now more people are selling gold than buying it.
People have been bringing in graduation rings, lucky charms, key chains, mismatched earrings. A few have even started selling their baby's gold rings.
"The other day a woman pushing a child in a stroller sold us three," Yoon said. "As she did so, she murmured, 'Sorry, son.' "
Posted at 11:44:41 AM
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