Gold still shines
By Daniella Miletic | theage.com.au | 17 March
For the first time, gold traded above $US1000 an ounce on the futures market last week - up almost 20% since the start of the year. Jewellery industry figures have warned that price rises will inevitably be passed on to consumers, with increases of up to 30%.
Jewellers Association of Australia chief executive officer Ian Hadassin said the gold price directly affected the cost of plain gold jewellery, but jewellers had not changed their stock so the latest surge in gold would take time to filter through to the shops.
He said the price difference in a stone ring would be marginal but heavy gold items were likely to be significantly more expensive.
"With diamond rings, it goes up but not much because most of the cost is in the stone," he said. "But certainly gold chains and bracelets will go up a fair bit."
New stocks of gold jewellery could be higher in price by up to 20 to 30%, he warned. Trends in jewellery were expected to change in response to higher gold prices.
"People who used to buy 18 carat will now buy nine carat because they find 18 carat unaffordable and people that used to buy nine carat might start buying a lighter weight chain," he said. "And the hollow chain might come in because prices will be reduced on that basis."
Jewellery shop manager and designer Kara Breadmore said prices had increased in the past six months.
"Everyone and anyone is commenting about it. Most people are fully aware of the price of gold and are very shocked by it," she said.
Ms Breadmore, of Klepners Fine Antique Jewellery and Valuers in Melbourne, said there were more people trying to sell their gold then people trying to buy it.
She said gold had become so expensive few students in her gold and silversmithing course at RMIT University could afford to work with it. "It's pretty funny when you're trying to become a goldsmith that you can't afford to buy gold."
The higher gold prices had coaxed many Victorians into having their jewellery revalued, she said. "People are coming in, who haven't had a valuation for five years, saying 'oh wow'. Some people gasp when they get their document back."
Mr Hadassin said gold prices, fuelled by speculation, would not stop increasing until the US dollar strengthened. "Whether people will stop buying gold jewellery altogether or not remains to be seen," Mr Hadassin said.
"I don't think they will stop because jewellery is an emotive product that people buy for special reasons."
First published by TheAge.com.au on March 17 2008
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