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The market?


#1

I am interested in knowing some thoughts on the Market and the price
of metals being so high, and what the market will look like AFTER it
corrects.

Will vendors keep the price high on gold/platinum for profit? Will
the retailer keep the prices at current levels for their own profit?
I don’t see the market bottom falling out and going so low that gold
will be at bargain prices, I’m not sure what the landscape will look
like after a correction. If the market does correct, and gold drops,
the economy picks up, will jeweler stores pop back up enjoying some
of the market place that thinned over these past few years?

Just some thoughts, and looking for some input.

BVW


#2

I wonder who is making profits with the price of metals being so
high? I certainly wont be making any money if the spot price of
precious metal drops severely, I have had to buy some of it to make
my stuff and when the price drops if will look overpriced compared to
scrap value wheras at the moment I am selling items for little more
than the current scrap value. one that make me laugh at the moment is
peple asking for a discount if they buy say 2 silver clasps rather
than one. At current silver prices I am getting about $2 per hour for
my time so the emphatic answer is “no”. I have scrapped quite a lot
of old jewellery that has been sitting around for a few years and
spent the money on new (non precious metal) stock. Have you had a
look at what is selling currently? Big gold jewellery is rerely worn,
I see mostly good quality gemstones on people’s fingers and wrists at
the moment.

Nick Royall


#3

What really flabbergasts me is that one of the jewelry places that
sells regularly on the television is offering finished gold and
silver jewelry at bargain prices. Sterling rings set with nice
gemstones for $29.99, and gold rings also set with nice stones are
being offered at around $129.99.

They must have really stocked up on precious metals before the
prices hit the stratosphere.

Alma


#4
I wonder who is making profits with the price of metals being so
high? I certainly wont be making any money if the spot price of
precious metal drops severely 

A touchy subject, so let me say it this way. In Karate Kid movie, mr.
Miyagi says - paraphrasing “you should practice karate or you do not.
Practice so so and get squished like a grape” The same can be said
about goldsmithing. If one does large scale production, than hedging
is a viable technique to deal with price fluctuations. If one does
handmade, using traditional techniques, then it does not really
matter what price of gold is. Everything is done in house. However, if
one practices goldsmithing “so so”, meaning buying prefabricated
stuff and simply finishes it, with some little assembly, than
fluctuations in gold price become a really big problem. It is because
every prefabricated or cast item carries a surcharge to cover losses
and other expenses, which grows exponentially with price increase, so
as mr. Miyagi said " one gets squished like a grape "…

Leonid Surpin
www.studioarete.com


#5

It seems to me that if a vendor buys silver or gold at the current
high price, they are not going to be able to sell them at a reduced
price if the commodity price drops. However, some who deal in
precious metals adjust their prices daily based on the commodity
price. That way, they are better able to deal with the fluctuations.
What I do is price my precious metals based on what I paid for them.
This creates a problem when prices go up and a benefit when they go
down. If there is a huge increase in price, and I buy some items
that are a lot higher, then I may adjust all my precious metal prices
accordingly. However, my system is not set up to handle a lot of
price changes, so I only do that on a rare occasion (like once in 10
years.) I do watch the price and make my purchases when it takes a
dip.

I really believe that silver prices are going to stay high for a
long time. The reason is not purely based on the economy, but rather
on the demand for silver. It is used in both high tech and medical
arenas (as well as other areas) which will only have increased demand
over time. Gold, I don’t know about that, but I suspect that the
mining of it will eventually deplete easily gotten supplies, making
it more precious over time.

Too bad Rumpelstiltskin couldn’t spin straw into gold. We could use
that trick now.

Susan
Sun Country Gems LLC
http://www.suncountrygems.com


#6

Until you have to do repair on these “well” priced items, you will
never know how cheap they are. They are getting what they paid for.
I now charge more to repair the cheap stuff than I do to repair the
quality jewelry. I pretty much pass at repairing the cheap stuff
anymore. It costs me too much time and headache to repair it
properly. I refuse to repair it improperly and send it out with my
name on it. I wasn’t taught that way, and am not going to start
doing it now. When you charge more for the repairs than what they
originallyl paid for it, they get angry. It just is not worth it.


#7
Until you have to do repair on these "well" priced items, you will
never know how cheap they are. They are getting what they paid
for. I now charge more to repair the cheap stuff than I do to
repair the quality jewelry. I pretty much pass at repairing the
cheap stuff anymore. It costs me too much time and headache to
repair it properly. I refuse to repair it improperly and send it
out with my name on it. I wasn't taught that way, and am not going
to start doing it now. When you charge more for the repairs than
what they originallyl paid for it, they get angry. It just is not
worth it. 

True. But you can always just tell the customer how much labor (cost)
is involved. I’ve fixed some awful junk for people, but I charge the
same to repair garbage as I do to repair fine jewelry. Very often one
man’s trash is indeed another treasure and people are often quite
willing to pay more for a repair than for the original piece so long
as the bill is not a surprise.


#8
I am interested in knowing some thoughts on the Market and the
price of metals being so high, and what the market will look like
AFTER it corrects. 

The price of gold, and everything else, is based on the value people
place upon it vs everything else they could buy. The price of
precious metals is actually the price (value) of currency. Right now
currency isn’t worth much in people’s minds (and in reality.)

When the market corrects…well, with Keynesian’s in power it never
really will as it should.

The whole purpose of the complicated mess our nations economic
system has become is to avoid the natural cycles of an economy and
we’re left with a boom & bust cycle instead.

The market will look pretty much the same. We’ll get used to higher
prices, and nobody will do a thing to change it.

A group of men long ago knew this: “… all experience hath shewn,
that mankind are more disposed to suffer, while evils are
sufferable, than to right themselves by abolishing the forms to which
they are accustomed…”

Will vendors keep the price high on gold/platinum for profit? 

If you’re not in business expecting to profit you will fail in
business.

Will the retailer keep the prices at current levels for their own
profit? 

The retailers will aim to earn as much money from their investments
as possible. And if they serve their clients they will be rewarded
with profits.

I don't see the market bottom falling out and going so low that
gold will be at bargain prices, I'm not sure what the landscape
will look like after a correction. 

The value of the dollar could rise again to pre-1913 levels and gold
could very well be as it was then, but it won’t happen until the
United States government’s debt is cleared. Since it can never be
paid off, but since the creditors demand payment for their
investments, the fed will likely attempt to monetize the debt, which
means they will print currency and use that to pay off the debt.

Of course the currency will drop in value rather quickly, and in
spite of government lies to the contrary, we now have inflation and
we will have hyper-inflation. The government will collapse and an
imperial government will rise from the ashes; No constitution, no
habeas, no rights. Or maybe we’ll get a charismatic leader like they
got in Germany…

If the market does correct, and gold drops, the economy picks up,
will jeweler stores pop back up enjoying some of the market place
that thinned over these past few years? 

Funny thing, our pre-conceived notions…I’m a small independent
jewelry company. I specialize in repairs. I do all the mundane,
boring crap that most jewelers absolutely despise. Do you know that
since the price of gold shot up I haven’t had a lull in my work? And
I’m in a little podunk town is the south.


#9

Buy your gold as scrap jewelry the average pay is 50% of spot then
send it to the refiner and get back your lot as pure metal. You can
alloy, cast, roll, make your wire etc. to make your product. A big
benefit is you can advertize that you use green gold I have been
doing this for years basicly paying 1/2 price for gold i am
surprised others havent figured this out yet or maybe they have and
are not telling keeping the secret so to speak ?

goo


#10

I don’t think that the price of materials is nearly as much of a
factor in the soft market for jewelry right now so much as just an
over-all consumer reluctance to spend on discretionary purchases.
Higher materials are going to make it so we need to charge a higher
price, but it is not demand for jewelry that has run up the price of
precious metals. If it was jewelry demand that caused these high
prices, you wouldn’t be hearing too many jewelers complaining.

My prediction is that lower and middle priced jewelry is going to
move more towards alternatives to precious metals and that middle and
higher end jewelry is going to have less competition from low-ball
manufacturers in silver and gold. I would expect that higher volume
manufacturers that are used to smaller profit margins are going to
have a very bad time keeping in the game. Ditto retailers who sell to
the bottom of the market.

Higher end producers may survive better because the materials are a
smaller percentage of the cost compared to labor, design and
marketing. Or if they struggle, it is not material costs as much as
just lower demand that is the problem.

The good news is that if you are a real craftsman and can repair,
rework and do custom designs, there are a lot of people looking for
that kind of special service work. Trivial and impulsive purchasing
is down in this economy, but people are taking care of what they
already have and being more thoughtful about what they spend their
money on. So if you can offer them something really good and special,
and especially if you are willing to work with them on things tedious
and troublesome, there is enough business out there to keep the
lights on.

Stephen Walker