Is this good news or bad news? If you look at the price of precious
metals as an investment, the sharp fall in prices are a big
disappointment. But if you see it as a cost, it is a relief and an
positive opportunity.
I was talking to a supplier who said business is way up for them.
Jewelers are stocking up.
What kind of strategies and decisions are smart jewelry businesses
making? Are you stocking up? Waiting for the price to go lower?
Having a sale? Hoping it goes back up so your inventory is not
devalued?
More than one of the big suppliers are always closed for the week of
July 4. Are they missing a big opportunity or are they lucking out by
being excused from swimming in rough waters?
the odd part about silver is that I have noticed on a couple of
bullion sites that there are no silver 1 ounces pieces available
right now. Price goes down, supply dries up - what does that do to
the price in the future?
I think the only smart way to deal with precious metals costs is to
buy and sell as you need them and price the work accordingly. If
possible buy and sell your metal on the same day so that you don’t
have to deal with the volatility of the market. I know this is almost
impossible for most of us but it is the ideal. Getting too wrapped up
in the current price of precious metals is a good way to make
yourself crazy. The folks who try to explain the market are mostly
operating on beliefs not facts so IMO not a good source of
My belief is that gold is still overpriced by at least
$400/oz, and that is worth what you paid for it
Stephen- When metal prices are high we make more money since we
keystone the costs of materials. When metal costs are high it does
cut into the number of pieces we build for ourselves or just for fun.
When metal prices are high we make more money since we keystone
the costs of materials
Yes, Jo - depending on the work I might make 10-20 times the cost of
metal. $2 worth of gold on a reprong that gets charged $20/ea. Labor
is a factor but you’re talking minutes of time. Jo-Ann puts up Kitco
every morning but I just don’t care to watch it. Investingis what
that is for, this is vending - buy low, sell high.
I do watch metals prices for many reasons- The most major is I want
to buy at the lowest price I can, based on what I need in a given
period (I usually plan 2 major buys a year and have learned based on
historical charts, can pretty well predict when, during the seasons,
prices will go up or down) But if you aren’t set-up to predict your
needs or sales for a year’s time (in a broad, estimated plan based on
your client’s buying trends, or their upcoming events, etc.) just
buying when you need materials is all you can do. One option is to
buy in a group to maximize discounts, another to send in your
refining at pre-planned times that you feel coincide with trends in
your area or client base to maximize your personal savings potential.
With the metals market highly overinflated at present, and economists
predicting a " levelling out" at approximately 1000 an oz. for gold
in the near future, what are you to do if you need gold casting grain
now? Just buy it and figure your costs into your work and make more
pieces when you can. If your area or client base can support the sale
of luxury goods during the beginning of the fiscal year, offer a
"sale" on promotional and incentive items" to your corporate clients
to get them to order while prices are down on your basic raw
materials if you mill them yourself, If you do work for schools and
other groups, have an organised marketing campaign ready to go so
you can send out your materials and take orders, then buy and mill in
a week and produce and turn them around the next to maximise the
potential in the savings over this time last year in metals prices.
One thing to remember in preparing effective marketing materials
(branded pre-printed full colour oversized postcards or
announcements, or regular shows in your studio ro gallery that sells
your work) is NEVER put a date on them - keep them open ended as far
as what year so you have brand cohesion from year to year and your
identity is easily recognised, but have any policies that stay the
same clearly outlined (i. e.- you have a sale every year on holiday
castings and those cards reflect an order deadline, or an educator’s
back-to-school show and sale and admission includes up to 2 guests
with an RSVP)! You can always get them foil stamped with a specific
date as needed or otherwise, add it yourself with a word processing
application that is set up to batch based on your size parameters of
the advertising materials, etc. Your clients come to look for that
card as a reminder of your regular events and you can plan, based on
your sales figures and numbers of attendees how much metal you
anticipate needing in the coming period of weeks or months.
Bottom line when the market is lowest it’s usually a Friday and your
dealer will be closed the next day! When you watch prices in a week
the next week it jumps back up 30-50 bucks from it’s lowest when you
were paying attention! So if you see a price that seems great on the
day you check, and you need metal, buy it- keep your invoices in
folders with your metals of a given type if they are greatly
different (i. e.- your first 3 oz. coil of 16 g. triangular 18 kt
gold wire of the year cost $1475.00 an oz, and the second coil in the
same gauge cost 1230 an oz) so you can price by key and make money!
You aren’t in business to pass the savings on to your clients, unless
you get a very good deal and have more than you think you will need
and want to turn it into profit by selling off your estimated excess
of what was bought first - at a higher price - than what you can
replace it with at a lower price when you are certain (read: you have
orders on your desk) work is upcoming. Don’t buy low just to resell
unless you have a component of your business that buys at least 100
tr. oz’s of gold a week from the public. Otherwise the spot, or
portion of spot you get from your refiner can’t sustain the same
rate at which you sell back to the refinery. Some refiners don’t like
dealing with independent jewelers that have a few grams a week of
gold scrap and maybe an oz of fine silver and expect to receive the
same 98 %+/- of spot the gold buying retail jeweller brings in
weekly, or that you may bring to them only 4 times a year. and part
of that is that many smaller refiners don’t view independent art
jeweller’s businesses as being competitive with retailer’s and
discriminate or don’t understand the volume is not the same though
the independent does more actual bench work than a retail firm. and
would then rather treat you like the selling public and pay out maybe
30-40% of spot like the uneducated public…(I hate dealing with
those refiners).But they too are in business to make money, not to
supplement your income in the week you spent at the bench and have a
couple oz’s of scrap silver, a few grams of gold, and maybe.7 gm of
Pt while making pieces for an upcoming show and see you as using them
" like an ATM" !; A friend of mine told me the refiner we both use
told him that last week, and asked him “not to come back until he had
a reasonable amount of scrap to sell”…while in the waiting area a
man was there with a set of 3 fine silver 1 oz. ingot’s. the
difference is jeweller’s get at least 98% of spot and the public may
get 40 or so percent of spot Why then would the dealer give the man
working with metal as a livelihood but bringing him less quantity a
higher rate of return than someone selling off some coins or bars and
a broken necklace he found just to have some cash in his pocket ?
It’s partially discrimination on the refiner’s part against artisan
jewellers, the general misconception and an “hobbyist” association
and unless you develop a rapport with that business, it’s purely
business to him - Your time and energy is meaningless compared to the
return he’ll get from a higher amount of stamped and hallmarked
metal not in small bits and filings…
I hope this clarifies some points about metal dealings and market
watching and the different perspectives that effect metal trade on a
small scale and in small studios. and why it’s a better idea to buy
metals as you need them with a nod to the market until the time when
it actually makes a difference in your sales or profitability… rer
