Jewelry shoppers see prices rise
NEW YORK – Gold necklaces, earrings and bracelets may be crossed off some gift lifts this holiday season. With gold close to $800 an ounce, these perennial presents may be too much for some shoppers’ budgets.
Jewelry is more expensive because of the sharp run-up in precious metals prices on world markets over the past few months – an ounce of gold that cost $680 in mid-August has surged close to $850 before back-tracking somewhat. While daily market swings don’t immediately affect the price of, say, a gold wedding band, jewelry prices do reflect longer-term trends. And gold, rising on worries about high oil prices and inflation, has returned to levels not seen since 1980.
Although there are few signs of the frenzy that characterized the metal’s last foray above $800 – no one is queuing up to sell their jewelry – some consumers are having second thoughts.
Susan Raque, shopping along Chicago’s Magnificent Mile district, said she regretted not buying a gold necklace when the price was $500 an ounce not too long ago. Now, she may just have to wait and save.
“I’d definitely think twice about it if it (the price) were over the $500 mark,” the Louisville, Ky., resident said. “I’d just wait it out a bit and save my money.”
It’s true that gold at $800 gold isn’t the eye-popper it was in 1980 – an $800 ounce of gold then would be worth more than $2,000 an ounce today, adjusted for inflation. But the more gold in a piece of jewelry, the more shoppers will have to pay, and the more some of them will say no.
People who want “a heavy gold necklace or a heavy gold bracelet, and they shopped a year ago, they’ll see a big difference” in price, said Jimmy Pesis, owner of Continental Diamond near Minneapolis.
For example, a man’s heavy gold signet ring that cost $500 before the run-up could cost $700 or $800 today, according to one jeweler.
Jewelers are watching the price warily, knowing that while no one can predict what direction gold will take, it could indeed move higher. And while they know well-to-do shoppers will always buy luxury goods, they worry about the shopper with just a few hundred dollars to spare.
“The middle market guy is gone,” said Steve Greenberg, president of IMG Jewelry, a jewelry store near Cleveland. “The guy who had $500 to $1,000 to spend is gone. He’s paying for gas and food.”
A slowly rising gold price can be good for jewelers, allowing them to nudge prices higher. But gold surged nearly $200 in less than three months, a pace that makes it difficult for jewelers to manage inventory and convey to customers why prices are changing so rapidly. Platinum prices, meanwhile, are also up about $200 over the same period.
If consumers shy away from gold, smaller jewelers could be hit the hardest – they’re likely to see shoppers migrate to big-box retailers such as Wal-Mart Stores Inc. or department stores like Macy’s Inc. The big merchants are able to offer lower prices because of the huge volume of gold that they buy.
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