How are handling the record high gold prices in your jewelry making businesses? I can’t imagine how stressful it would be to own a jewelry store right now. Or to be a small manufacturer or designer craftsperson with a gold jewelry line.
Are you now incorporating more platinum or palladium, bi-metal (gold and silver) in your work? Are you just raising prices and hoping for the best? How often are you changing prices? Constant price changes can be a huge amount of work with updating price tags, signage, catalogs, websites, etc.
If you have any positive suggestions, strategies or feedback please consider sharing them with the forum.
Thanks!
Jeff
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I am not. I rarely use gold in my craft business. In the past two years I have had two customers that wanted gold in a piece of jewelry and we’re willing to pay for it. I have in stock two pieces of 14k wire that I bought at Christmas time. I can scrap them now for more than I paid for them.
My larger worry is the price of silver. We have weathered similar prices twice in the past 35 years and perhaps we will again. This rising price of silver will cause people to scrap their family Sterling flatware. I can easily see an end to ancient patterns while making existing patterns harder to come by.
Facebook has several people showing the world how easy it is to turn your old flatware into rings and pendants. All you need is a Bend-O-Matic Ring Shaper and a Harbor Freight 1" belt sander and you are in the craft business. I suppose this is fine if the ring makers are using stainless or plate but Sterling is a different deal. It is better than scraping Sterling I suppose but I am not sure how I like that. I have a pretty secure craft business. And Rob’s and my father left us a craft and customer base that is pretty solid for the now.
Maybe the answer is dropping down a gauge on the wire I use. Make my earring disks of 22 ga. instead of 20. Time will tell
Don Meixner
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Hi, I haven’t posted form quite a while… but.
Interestingly, though 90 % of our work is platinum, our 18K orders are increasing. All of our work is one of one (each day a new adventure !!). Since we’re custom, we get a pretty substantial deposit on each project. I let my clients know the issue with escalating gold cost. So, the first thing I do when the deposit is placed is order the gold. That freezes the material cost ( sort of). Most refiners price gold at the day of shipping, not the day of the order. This means I have to look at the market (Kitco) and guesstimate the rate of increase relative to the refiners shipping date. Since I mostly fabricate this isn’t a big leap. However, if I’m casting, it could be a week before I know the true cost (don’t forget shipping !). After having retail stores I’m quite sympathetic to the escalating material costs. Over my 63+ years in business I’ve seen the “Gold rushes” and subsequent falls . As a retailer it was easier to deal with because experience said it WILL fall…
However, this go around may well re-set the bar. There is a distinct possibility of 3500 + gold (some are expecting 4K), and the metals dealers are predicting 50.00 silver by the end of the year. The big question is anticipating the public reaction to pricing. At this point, while clients might wince, they still order. For me, I just resist carrying extra material so if / when the downturn comes I’m not caught out with depreciating stock. It’s a unique time we’re in without a clear sense of the outcome. I err on the side of optimism… but watch my back.
Cheers,
Jim
@jgrahldesign
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We have been using platinum more as well as doing more bi colored jewelry But as for the high prices of gold… we’re fine with that. We are wholesale/ bespoke jewelers. We keystone our cost of materials so we end up making more money. We encourage our clients to bring in any old jewelry. Pretty much every woman has a jewelry box full of stuff she doesn’t wear any more. So we have that scrap refined and use it for mountings. We have weathered several US economic crashes with sky high metal prices. Eventually things will stabilize and prices will go down. Remember by low sell high.
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I bought a lot of silver about 6 months ago and just scraped some gold. I was surprised at how much gold there was in my 3 year collection of polishing duff as I don’t really work much in gold. As Jo said, these things come and go. Right now I am trying to teach myself enameling, grow my engraving skills and cut stones. I have a lot of silver bracelets made up and earrings don’t take a lot of metal, so I don’t worry too much about the price of precious metal right now…Rob
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Hoard it!.. just kidding, but only somewhat… the amount of precious metal that goes into a piece of jewerly is far less than the value of the finished product, as YOU are the one creating the value added…as long as there’s no customer resistance to the increased price, you can pass on the price of gold to the customer. Customers still value gold for its intrinsic value and will buy jewerly for its worth…
From a historical and investment perspective (I’m still sitting on a hoard with intent to get it all refined)…the AVERAGE ratio of the price of gold to silver has been 40:1 over the last one hundred years… 15:1, prior the gold standard being abandoned completely in 1971… 60 to 65:1 over the last 20 years… Wild swings in this ratio have occurred. The Homestake mine in Lead SD shut down in 2001 when the price of gold dropped to $275/oz… they walked away from over 20 million ounces…silver was at $4.50… I was lucky to have bought a large excess amount of gold and silver at these prices… silver scrap was selling for $2.50 to $4.00… ended up with 25lbs of it…Gold is selling at a 100:1 ratio today…reasons being that economic uncertainty, dollar weakness due to economic uncertainty, and geopolitical risk all drive up the price of gold relative to silver. Investors and central banks have been ditching dollar assets (US company stocks, US treasuries, in favor of gold and the euro.) In addition, 50% of silver is used for industrial purposes, with only 7-10% of gold. The silver market is predicting lower industrial demand, again due to economic uncertainty and recession. For the long term precious metals investor, silver is undervalued relative to gold. These people shift into silver when the gold to silver ratio is higher than recent averages and shift back into gold when the ratio drops. For those fortunate enough to have substantial retirement savings, it’s also recommended to have 5-10% of your savings in precious metals, up to 20% as insurance against inflation, stock market crashes and geopolitical instability…I only have 2%…
Platinum is undervalued… 25% of the annual supply goes to jewerly, 30% to automotive, the 30% to other industrial uses, 15% to investment…25% of the annual supply comes from recycling…despite the potential of worsening economic conditions, the supply deficit continues to increase… being 15 to 20X less abundant than gold, platinum should make a comeback.
The cumulative rate of inflation since the year 2000 has been 85%, an 8.5 fold decrease in the value of the dollar… it’s fair to say that precious metals and gemstones have increased tenfold since 1968, when I took my first jewerly making class in high school. It’s also fair to say that the dollar will continue to depreciate (inflation) so long as there’s a budget deficit, which is covered by printing money (US treasuries)…
I stocked up on metal supplies when it was low and just kept stocking it up and hoarding it so nothing really bothers me right now plus I don’t hardly work in Gold because it’s just too expensive. If I have orders for gold pieces I make them prepaid and then order the gold
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