“Soaring gold prices prompting shoppers to invest in bling” |
| Soaring gold prices prompting shoppers to invest in bling Posted: 16 Jan 2011 02:58 AM PST HACKENSACK, N.J. — The run-up in gold prices is driving jewelry prices higher, and also is driving more people to buy jewelry as an investment. "The rise in gold prices raises the value of all the jewelry people already own," said Nancy Schuring, owner of Devon Fine Jewelry in Wyckoff, N.J. "That is an affirmation that, 'Hey, I bought something, and it got more expensive.' " Gold gained 26 percent in 2010, reaching a record $1,432.50 an ounce in December before falling back at the start of this year. Gold prices have been climbing steadily for seven years, fueling a "cash for gold" frenzy. A national company advertised during the Super Bowl, and charities have held "turn in your gold" parties to raise money. Many jewelry stores stayed afloat during the recession by buying gold jewelry and reselling it to refineries. All the "We Buy Gold" signs created a new consumer mind-set that they can cash in old jewelry for new pieces, which helped boost sales during the holidays. "People bring stuff in, and they basically do a trade-in, like a car," said Stevan Buxbaum, president of Buxbaum Jewelry Advisors, an affiliate of liquidation and turnaround specialist Buxbaum Group. "They sell some of this, and they get credit, and they turn around and buy something else," Buxbaum said. In Wyckoff, Schuring said: "We're accepting a lot of gold as payment, so old jewelry is brought in, and it turns into new jewelry." "People appreciate jewelry now because they're seeing the intrinsic value of it due to the whole cash-for-gold thing," Buxbaum said. "People all of a sudden realized, 'Hey, I can't go buy a Ralph Lauren blouse and three years from now go sell it and get anything for it.' But they can take a piece of jewelry and get something for it." The run-up in gold has been outstripped by a recent surge in silver, which became more fashionable this past holiday season. A recent Tiffany catalog featured silver pieces almost exclusively. Manufacturers also have changed their product lines to keep jewelry affordable. "More companies have created jewelry with semiprecious stones — and even precious stones, diamonds — set in silver, which you just didn't see before," Buxbaum said. "Now, it's fairly common." The increased demand for silver was a factor in its price surge, but the price per ounce still is a fraction of that of gold. Silver hit a 30-year record of $30.75 an ounce in December; it has since fallen back below $29. The price difference has caused jewelry designers and craftspeople to switch to silver or combined silver-gold pieces for their creations. In Englewood, N.J., Manuel Pinzon, who creates rings, bracelets and other items in his workshop in a corner of his store, Arielle's Gallery, said he is doing more work these days with bi-metals — sheets of silver covered with a solid layer of 18-karat gold, which he shapes into his designs. "Using bi-metal keeps the price of each piece down," Pinzon said. "One shopper walked in and looked at a piece that was about $149, and she said, 'That cannot be gold.' And I said, 'As a matter of fact, it is,' and she was shocked." Jeffrey Agnello, owner of American Coin & Stamp Co. in Clifton, N.J., is doing a brisk business buying gold jewelry and selling the types of gold products in fashion with investors: gold bars, American Eagle gold coins and Krugerrands. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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