Gold Prices

18k gold "Pearl Swirls" 

I'm not sure how many of you follow the gold market as closely as I (and most other jewelers) do, and frankly I never used to have to follow it as much myself.  Gold prices remained fairly stable for years and while they changed on a daily basis, we never used to see the kinds of swings that have occurred in the last few years. However with the stratospheric heights gold has risen to in the last few years it has become more and more important to watch where gold is going.  If I place an order for gold on downswings it can mean savings of up to 5% often on my metal costs.  Of course, since I can't predict where it's going in general, I also can get hit on the upswing as I have no control over when my orders will be produced and actually shipped and I pay a price for the metals based on the day they are shipped. In the long run for me price variations don't make a huge difference since sometimes I pay more and sometimes I pay less. It all tends to average out in the long run.  I also learned long ago that I could no more predict the way gold was going then I could predict when the sun was going to shine next. 

All that being said, gold seems to be on a downward slide right now.  It has come down from its highs and is hovering in the upper $1500 range right now.  As it happens it did this same thing last year around this time, so this may just be another seasonal temporary drop.  However a good deal of the reason gold skyrocketed as it did had to do with people's fears about the economy and there are now very distinctive signs that the economy is picking up steam again (check out today's job report) which could lead to a longer term, more permanent, drop in the price.  While the days of $400/oz gold will probably never return (it now costs more than $800/oz to retrieve 1 oz of gold from the ground), it is possible that we could see a return to more subdued figures in the long run. Please remember here that I have never been able to predict the price of gold so I may be completely wrong in all of my thinking but I do read a lot about the movement of the market and I think it will continue a slow but steady drop over a long period of time. I also have customers who are in the market and they claim it will start to go up again and reach new heights but to date it hasn't gone back up to its peak of $1900/oz that it reached in September 2011 and I'm not sure it will during the near future.  Notable also is that most gold mining company stocks have plummeted in the last year. 

So why am I bringing all this up?  Well as some of you know by now I will take gold in as payment towards custom work and case sales (and repairs as it happens).  I don't buy gold outright from anyone but it has turned into something as good as cash for me since I have a network of scrap buyers who will pay me on the day it has been turned in, which means I can pretty much guarantee what price I will get for it.  And I have had a lot of customers coming in the past two years who have taken advantage of this to get themselves into some new pieces of jewelry using old jewelry that is broken, unworn or, as in the case of earrings, where parts have been lost. With gold prices where they are these bits and pieces can add up significantly fairly quickly.  This is the first time in history that you can sell for scrap commercial pieces (note this will not apply to handmade, designer or custom pieces as the labor charges are much higher on those items) you bought 7-20 years ago for more than you paid for them.  However with gold prices on the downward swing, you will get less for your scrap and it might be time to finally consider gathering up all of that stuff and trading it in.  Even if you don't know what you want right now, I'm always happy to keep a credit in my system for future purchases.

Pictured above are some new earrings I did recently.  18k yellow gold and pearls.  By the way, my offer in my last post for a $50 store credit if you come in and ask to see the orange sapphire is good through the end of March.