Jewelry in the 80s

Hello everybody,

Have a question for the folks who were in business in the early
eighties, when gold was $800 an ounce.

How did you do it? How did you open/run a business in that kind of

It seems to me like we’re looking at a repeat of the same economic
circumstances, and I’m concerned - both about the rising cost of
gold, and the ability of customers to buy my jewelry.

Should I buy gold now? Or should I wait the projected five or so
years until the dollar strengthens and the economy evens out? Am I
making this harder than it needs to be?

I think the new and nearly new among us could benefit from the
survival skills acquired by those who survived bad economic times.
Any stories/advice anyone?

Thank you in advance, I await replies with some anxiety. :slight_smile:

Susannah Page-Garcia
Moonshine Metal Creations
San Antonio, TX

Should I buy gold now? Or should I wait the projected five or so
years until the dollar strengthens and the economy evens out? Am I
making this harder than it needs to be? 

First of all, understand that you are a jeweler who needs metal to
work. You are not really an investor in gold. If you buy a lot of
gold now and it goes down you may be forced to lower your prices on
it and you’ll make less money. If it goes up you’ll make some extra
money (if you feel comfortable about raising your prices) but when
you do have to replace the gold you’ll be paying the higher price
anyway. Buy what you need to do your work at the moment. Leave the
investment risks to the investors.

Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140


My first day in business was the day of the blizzard of 1978 which
dumped 4 feet of snow on the Northeast and actually shut down I-95
for over a week. After that things really got interesting.

Just after that Nixon decided to “float the dollar” and it promptly
sank out of site. Gold went to $100.00 per ounce and didn’t quit till
it hit $850.00.

What do you do in a hyper-inflationary economy? Constantly monitor
your prices. Your prices must keep up with the cost of materials. A
few foolhardy jewelers held the price line and sold based on their
old cost. They found that replacement costs shrunk their buying power
and therefore their inventory out of existence and one of the laws of
retail: Ya cant sell it if ya don’t have it.

If you are trying to build capital, you can always buy gold. I did,
though I was so poor, I usually had to turn it over within a couple
of weeks. Big manufacturers hedge the market, they buy a kilo and
sell a kilo all on the futures market, one way to guarantee stability
in your costs. One of the most interesting phenomena of that period
was the rise of the scrapper. These guys knew nothing about gold or
gems. They would pay about 50% of market for anything gold by weight
and $250.00 per carat for anything they couldn’t scratch with a
diamond test point. People lined up to sell. I occasionally bought
diamonds from one of these guys paying about half of wholesale.

When gold hit $525.00 I took my Xmas profits and bought a kilo (1000
ounces) on margin. You could do that for 25% down in those days. The
next week I sold it for $650.00 per ounce, bought a ticket, closed
the shop and spent the winter in the Carribean. I was in the airport
in the British Virgin Islands when gold hit $850.00

The moral of the story: As Rhett Butler pointed out: there is often
more money to made in the wrecking of a civilization than in the
building of one. A major runup of gold is unlikely at this time.
Should it happen it will bring with it great tragedy and great
opportunity for those who are alert.

As Richard Nixon once said: “The American dream does not come to
those who fall asleep.”

For Information and sample chapters from my new book:

Hi Susannah,

After the gold rush of the early eighties, gold set to a level of
right around $325.00 per oz. This average gold price stayed for over
20 years. It went up and it went down $25 or $30 but stayed right in
this general area.

Gold is a commodity like everything else. As prices go up, gold goes
up. Prices in the last three to five years have pushed gold to $435 -
$450 per oz. This past year prices around us have gone up leaps and
bounds - housing, gas - you name it. Gold also has to seek a common
level. My suggestion is to buy it when you need it. Price your items
accordingly and don’t worry about the public not buying. Every
business that sells gold, in one shape or another, will also be
selling it at the market rate - not just you. The price of gold is
not going to slow customers from buying.

Dean Gordon

GOLDesigner Ltd.
Gold casting svcs.


I have been in the jewelry business since 1973 and owned my own
jewelry store for most of those years.

Actually rising materials prices offers a great lesson in not over
stocking items which can weigh down a business. Create a written
business plan for 2006 and this way you will have a basis for how
much to order and when.

It also helps to learn that the metals you use are only part of the
price equation. You need to charge appropriately for your time,
knowledge and labor. If you are selling jewelry that is based on
weight then you will have a much tougher time than selling knowledge,
workmanship and service.

During the huge rise in metals prices in late 1979 and early 1980
there was actually a rise in the number of people that where buying
jewelry, coins and precious metals due to the amount of News

You can also use rising metal prices as a great time to get rid of
old stock items, scrap and bench sweeps to refiners.

Good Luck
Greg DeMark
Custom Jewelry - Handmade Jewelry - Antique Jewelry

Oh Susannah (couldn’t resist),

I opened our store in 1979, and began a wild ride on the metals
surge for the next couple of years. Like most situations, there were
both positive and negative impacts, and as a business owner you need
to maximize the first and avoid the second.

On the positive side, we made a huge amount of money in buying
metals from the public and re-selling them as fast as possible. I
have never believed in trying to play the investment game, trying to
guess the the flow and direction of the market. I would pay cash at
50% of the return, have a set amount of cash to work with, then
liquidate as needed. Refiners would be paying about 90% of market,
and we would drive the metals to them up to twice a week. Like any
retail business, turnover is the key to profitability, and the margin
would pretty much remove any possibility of loss.

We bought mainly silver coin and gold rings, and paid $1.00 a point
for the little diamonds that were in most of the stuff. The profit
was better than anything I have ever seen before or since, and
allowed us to purchase another jewelry store in another community. We
hired a full-time employee to handle the metals purchasing, became
licensed by the State of Michigan, and played a rold in recovering
stolen jewelry on several occasions, as that also was a negative
by-product of that period.

As to selling our regular products, we made some changes in selling
that helped. We sold chain by the gram, and adjusted the price daily
to avoid any loss. We would go through the entire inventory and add
some as the price went up, but you will find that the overall gross
retail price doesn’t fluctuate greatly as the metal price is the
smallest portion when compared to labor and stone values. On new ring
orders, we tied the quote to a gold price, and customers were
understanding that the end price they paid might go up somewhat if
metal did so. Surprisingly sales were very strong during that period
as there was so much talk about the Hunt brothers and gold price s
that people seemed to think they should buy now and not wait to see
where the prices would go.

On the negative side, there were two main difficulties we faced. One
was that interest rates were also going through the roof, and I
remember paying over 22% on our bank loans during that period. Being
new in business, we were heavily financed, and it became very
difficult to just pay the interest let alone anything on the
principle. The other major problem was one that many people don’t
remember as well, and that was the “investment diamond” craze that
paralleled metals. These phony company representatives worked the
automotive plants, selling diamonds at above-retail prices to the
factory workers, promising inflated returns on their investments,
and leaving town with their hard-earned money. A 1.00 carat
D/flawless went from $13,000 to $56,000 in a couple of months, then
crashed back to reality after the companies started to be exposed and
the guarantees proved worthless. It took a long time to recover from
this situation, but as with most problems of this nature the business
finally settled down to what is considered normal.

This is a long-winded response to your question, but if you want me
to be more specific on certain areas write me off-list.

Jon Michael Fuja

The moral of the story: As Rhett Butler pointed out: there is
often more money to made in the wrecking of a civilization than in
the building of one. A major runup of gold is unlikely at this
time. Should it happen it will bring with it great tragedy and
great opportunity for those who are alert. 

You got that right!

I lived through that period, as well, and found that you can’t lose
if you “Buy when there’s blood in the streets”. Throughout my life,
the best lesson I ever learned in business is to make your money on
the buy end.


Hello everyone,

I’m sure Susannah’s concerns about rising metal prices are shared by
a number of people. Thinking back to the 1980’s, it was a bit crazy.
I do remember very long lines of consumers waiting to sell anything
gold to those jewelers that were buying scrap. I also remember
consumers choking when they found out that a heavy plain polished
wedding band could cost them $750.00 or more! There was a lot of
"sticker shock" at the peak.

To compensate, some jewelry started to become thinner and lighter.
We used to see a lot more 10K merchandise. Platinum and silver were
also up there in price, too. But there were also a lot of consumers
who still could afford and aspired to finer quality jewelry.

The industry survived and even prospered after the initial shock.
Because the high metal prices were on everyone’s mind, it also
created an awareness of the metals and even sparked demand. I
remember lots of salespeople pushing jewelry as an “investment”.

This past Holiday Season, we found that the nearly $1,000.00
Platinum market had little impact on our Platinum sales. It seems
that the price made Platinum products more exclusive and therefore
more desirable. Because of the price, it’s on everyone’s mind; again,
awareness can spur demand. That’s not to say that there are some
consumers that have been priced out of Platinum products. For them, a
number of companies are advocating 585 Platinum and Palladium
products as an alternative. We are beginning to offer some products
in 950 Palladium (wedding bands & mountings) not only as an
alternative to Platinum but also as an alternative to white gold in
order to address the “whiteness” and “workability” issues of white

Bottom line, the industry will address and adapt to current market
conditions and demand just as we have in the past.

Remember, Jewelry is, and always has been, a luxury item. Consumers
will continue to purchase jewelry, perhaps even more, just like they
will continue to purchase $6,000.00 plasma TV’s, Lexus and BMW
automobiles, cruise vacations and custom made golf clubs. Some
consumers may not be able to afford top shelf, but they will buy the
32" LCD TV’s, the Lincolns and Volvos, the weekend B&B get-away and
the Tommy Armor clubs. I’m more concerned about consumer confidence
than metal prices in the long run.

Gene Rozewski
Rochester, NY

Not meaning to lay a bummer on folks, but there is a very
interesting and disturbing series of articles now running in the New
York Times under the title “The Cost of Gold.” It is too long for me
to impose it on this discussion group unasked for, but worth a long
look at if you can stand asking yourself the hard questions. This is
no particular problem of this industry - those kinds of questions
need to be asked by anyone - but I think it is helpful for us all to
know where we are in the great web. Gold - beautiful and useful as
it is, has a long history of leading folks down shadowy paths that
they never would have dreamed of taking. It costs us more than
money, that’s for sure.

Take a look. You can tap into the N.Y. Times on the web.

Marty in Victoria where it is howling windy tonight.


When gold hit $525.00 I took my Xmas profits and bought a kilo
(1000 ounces) on margin. 

I’m sure that you meant to say; a kilo (1000 grams), not 1000


Joel Schwalb

How did you do it? How did you open/run a business in that kind of

After the robberies and down turn lots went out of the business and
never returned, as by then they were weakened financially and
traumatized by all the robberies leaving the space for new comers to
come up and take over, and now it is their turn to experience what
their predecessors went through 25 years ago. Life just repeats
itself. The farmers always wait for the fruit to ripen before picking
and so do the thieves, they are watching all the time looking for the
shops to prosper before they visit.

Sorry to say not good.

I kept some news clippings from exactly that time and here are a few
highlights from those clippings.

“Montreal paper” Feb. 1980

  Montreal area jewelry store owners are taking extra
  precautions these days to protect their merchandise and their
  lives, as the price of gold and silver remain at record highs. 

  But despite these precautions, "at least one jeweler has been
  robbed every single week since the beginning of the year. 

  With the price of gold and silver, and the value of the
  Canadian dollar, my customers just won't pay the price for a
  good watch, but thieves are lining up at my door to beat their
  way in. 

  "End Montreal paper highlights" 

There is an interesting history sheet on the price of gold at I found one day and I was amazed to see back in the 1800’s
the price was the same for over 100 years. Life was so stable back

That is why the rich had it so good back then, their money never
shrank, most people never had a chance, There was no
money to make or loose with gold from 1833 to 1932

Can you imagine the ocean of oil that J. Paul Getty sold to become a
billionaire at 2 cents a barrel back in the 1890’s

Ronald Ragan referred to stock loses back then (80’s) as corrections
“to soften the blow.”

So when your business goes down, just think of it as a correction
that you never deserved as much as you once had, and you are now
being corrected.

You see life is like the snakes and ladders game. Now is the time
that all those good years are washed up in a short time. Long to
build up and fast to go down. You must be very careful in these times
as life has a way of hurting the working people. You will soon see
(maybe already in the mode) companies not paying those that do the
work as they lean on the little people (they refer to that as “OPM”
others peoples money) “unsecured creditors” before the whole deck of
cards falls.

It seems that no matter how good things are they never seem to last.
Just like life itself. We have to be thankful for any good times we
ever had, as most have never tasted them at all.

Let us all hope I am wrong.

Allan Creates
P.F.F. Hinged Ring Shanks

I was in the Metalsmithing department at Syracuse University when
the price on silver and gold ran up. A group of us students pooled
our money to buy 12 inch wide silver sheet and saw the amount of
silver we could get for our cash cut in half before the order was
filled. The way I dealt with the high prices myself was to work
mainly in brass, copper and bronze with some sterling. I was mainly
doing mokume and I figured that mixed metals were not valued for
their precious metal content, so I might be just as well off if I
stayed with base metals. With hindsight I see that I would have done
much better if I had used more gold and other precious materials,
but I was caught up in a sort of shoestring budget mentality. I was
not alone. There was a lot of “art-ware” jewelry being made in the
1980’s that was made of non-precious materials. Big earrings and the
like were a lot of fun and so were alternative materials. This kind
of thing did not begin in the 1980s, but I would bet that a lot of
talent was deverted to alternative materils due to the higher cost
of silver and gold at that time.

Stephen Walker

Dear folks,

Let’s watch our facts when we’re talking about gold. Richard Nixon
resigned on August 8, 1974, so obviously was not around in 1978 to
make any kind of policy.

Gold was set loose by Nixon on Aug. 15, 1971; it then began to rise
in increments, moving slowly up to $200 and $400 until it reached the
$600 level in 1980. It did hit $850 on one day in 1980 and then
immediately started back down again.

“Gold bugs” then were predicting $1000 gold, just as they are again

There is a big difference between then and now: both China and India
are huge consumers of gold and are competing for the same product you
use to make jewelry.

Everything I’ve heard from jewelers through the years points to one
answer: buy what you need, when you need it, and increase your prices
accordingly. Consider how much of the value is the gold content.
Don’t mark up the piece across the board by the increase in price of

One last word about melting down gold pieces: one of the stories I
did in 1980 during the gold craze concerned a refiner on the Bowery
in New York. He told me that some of the work they were melting was
much more valuable for its artistic content but customers didn’t have
the patience to wait and sell it for that reason. Consider what
you’re melting before you toss it in the furnace.

Ettagale Blauer


Well now Nixon did indeed resign in 1978 but he was also responsible
for the policy that reversed the fixed price of gold and “floated”
the dollar and that was the point. I love the Nixon american dream
quote. Thanks for the clarification on the dates.


For Information and sample chapters from my new book:

The refiners were backed up back then, the most I recall getting for
silver was about $28 an oz.

I met one person who was rescuing hollowware- people were scrapping
stuff that had most of its value as a collectable object. 18th, 19th
century coffee and tea sets, silverware, with any luck most of the
rare and valuable items were saved. Imagine getting $10-15 an oz for
a Paul Revere bowl…

Rick Hamilton


My recollection is that silver reached a high of just over $50 an
ounce when gold hit about $850.


Joel Schwalb


I was not a jeweler in the 80’s but had heard about gold going up to
$ 850.00 well that’s not going to happen any time soon. In June I
made a prediction that gold will hit $ 500 in December. Now I say
gold will stay at 500 until June so get use to these prices for some
time and when it does come down it wont be lower than $ 435 to $ 450
but its not coming down any time soon. I am not responsible for any
bets you make in the futures market.


Hello, Everybody,

I want to thank everybody that replied to my question, I’ve learned
a lot.

Mostly, I was gently reminded that jewelers must think of gold and
silver somewhat differently than investors. I went ahead and bought
what I needed, and in fact upgraded materials based on the advice of
those who said they could make more money in precious jewelry rather
than brass and copper art jewelry.

Basically, I’d been reading and had panicked. I no longer
allow myself to read this site before bedtime.

Again, everyone, thank you.

Best wishes,
Susannah Page-Garcia
Moonshine Metal Creations