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Rising prices on jewelry
Rising prices on jewelry
By JAY LOOMIS
THE JOURNAL NEWS
(Original publication: December 3, 2005)
Lisa Gagliardi tried on earrings and browsed the glass display
cases holding gold pendants, diamond rings, shiny watches
and pearl necklaces at Palmer Jewelers in Larchmont. It is
one of her favorite places to buy holiday gifts for friends
and relatives.
"There is such a big variety of price points if you want
to buy a gift for someone who has been good to you,"
said Gagliardi, a resident of Larchmont who works in retail
sales.
Yet Gagliardi and other shoppers are seeing higher prices
for jewelry items at some stores this holiday season with
further hikes expected in 2006. The biggest reason is the
rising costs of precious metals and minerals that go into
jewelry
• Gold prices climbed above $500 an ounce this week
for the first time in 18 years. They are up nearly 15 percent
this year and more than 80 percent in five years.
• Silver prices have surged nearly 25 percent this year
and 76 percent in five years.
• Platinum prices are up 16 percent this year and 60
percent in five years.
• De Beers, the world's biggest diamond supplier, followed
last year's price hike of 14 percent with increases of 3 percent
each in January and June.
Rapid growth in developing countries such as China and India
is one reason that demand for precious metals and other commodities
is increasing and prices spiking. Prices for gold and precious
metals also generally increases in times of economic uncertainty
and rising inflation as investors flock to hard assets as
an inflation hedge.
At Palmer Jewelers in downtown Larchmont, co-owner Cynthia
Valenti said that the store largely avoided the higher metal
costs by stocking up on merchandise in the summer.
But when Valenti re-orders in early 2006, she expects that
the retail price of gold hoop earrings will go up from $120
to $150 and the price of a diamond eternity ring will climb
from $3,200 to $3,900.
"People are shopping a little more cautiously because
the price of everything is higher, but they are definitely
still shopping," Valenti said. "I do feel that we
will have a good (holiday season). ... We are still seeing
our regular customers that we see every year."
Mike Welsh stopped by the store this week to order jewelry
for his wife's Christmas gift. Welsh, a postal worker from
New Rochelle, said that higher prices won't alter his shopping
habits.
"If you want something bad enough, you will pay for it,"
he said. "The price doesn't have that much to do with
it."
Gina Blanco, a stay-at-home mom from New Rochelle, plans to
spend a combined $300 on earrings this holiday season for
herself and her 10-year-old daughter.
If prices go up, "I'll just buy a less expensive item,"
Blanco said.
Gold prices remain far below the $873 an ounce in 1980 when
the U.S. economy was mired in a deep recession with double-digit
inflation. Gold was so high then that large numbers of customers
flocked to local retailers to profit by trading in old, unwanted
items or those from the estates of deceased relatives.
This year, merchants said they have seen a small number of
such trade-ins, but nothing like the frenetic pace of 25 years
ago.
"I don't think it has hit the street yet that gold is
$499 or $500 an ounce," said Stephen DeCristofaro, manager
of Harnik Brothers Jewelers in Tarrytown, which has been in
business for 55 years.
DeCristofaro sees positive factors at work in the economy
that could offset the headwinds from rising jewelry prices.
Consumers may have more money in their pockets, he said, because
of a recent moderation in gasoline prices, an impressive November
surge in the stock market, solid economic growth and strong
bonuses on Wall Street.
"The economy is doing pretty well, and diamond jewelry
is very hot," DeCristofaro said.
Business has been strong at Tiffany & Co. with profits
up 37 percent during the third quarter and sales up 12 percent
at the company's flagship store in Manhattan.
About 21 percent of consumers nationally plan to buy jewelry
or watches during the holiday season, according to a recent
survey by the Jewelry Consumer Opinion Council. More than
one-third of those shoppers said they will spend more than
in previous years.
At Anthony Robert Jewelers in Nanuet, a half-carat pendant
with 32 diamonds sold for about $420 a year ago. These days
it sells for about $520, reflecting the rise in metal and
diamond prices.
"People are still buying but sometimes they may be going
for smaller items because of the cost increase," said
co-owner Robert Goneconti. "For us, we might make a little
less profit on a smaller item."
http://www.thejournalnews.com/apps/pbcs.dll/article?AID=/20051203/BUSINESS01/512030327/1066
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