Our customers don’t really seem to care about the price increases of
precious metals. Apparently, the higher cost of one custom made
piece doesn’t really make a significant difference in our customers’
desire for quality or their willingness to pay for exactly what they
want. I am much more shocked at the increase than they appear to be.
Ask again when gold hits $1200 and platinum is over $2000. That might
just make a difference.
It’s the root causes of gold’s price hike – the plunge of the
dollar, the fall of the stock markets, increasing oil prices and
falling real estate values that has me worried about 2008.
Neil, while I almost always agree with you, I must disagree with your
statement as to the price difference of gold and platinum narrowing.
When gold was at $350, platinum was around $600, about $250 an ounce
difference. Now gold is over $900, platinum is around $1570, a
difference of almost $700. It may be narrowing percentage-wise, but
it’s nearly three times the dollar difference from three years ago.
With the higher purity and higher specific gravity of platinum, the
price of finished platinum jewelry has increased at a substantially
higher rate than gold, at least it has for jewelry that I make.
Fortunately, the gross profit has increased correspondingly, assuming
a similar margin. That’s where I see the possibilities for greater
profitability of platinum jewelry.