Since the earliest recorded use for decorative items in 4000 BC, gold has never lost its appeal. According to the World Gold Council (WGC), gold remains popular as of press time, despite hovering around $1,930 per ounce, up sharply from a decade ago, when it sold for just under $1,400 per ounce.

The consensus among retailers is that the gold price has not had a negative impact on their overall jewellery sales. “Consumers will react to price changes, but once the price stabilizes, they will get used to it and expect to pay that amount,” said Debbie Fox, owner of Fox Fine Jewelry in Ventura, Calif. “Since there has been no significant change in the gold price recently, the impact has been minimal.”

One segment she found showed a stronger response was her older clientele. “When they come in to buy, replace, or repair items, they are shocked because they haven’t shopped in years.”

Randy Mitchum’s business was also not affected by the rise in the gold price. “Whether the gold price is $1,890, $1,900, $1,920 or $1,950, it hasn’t affected any part of our retail business so far,” said the owner of Mitchum Jewelers in Ozark, Missouri. “We don’t dwell on that, [we] try to keep our team alive with the positive things happening in our industry and in our stores.”

Heavy Gold Jewelry

Still, both Fox and Mitcham believe that heavy gold jewelry is a category that is closely related to the price of the metal. Mitchum acknowledged that prices in this segment “are likely to rise or fluctuate more than others”.

For Fox, the situation prompted a change of tactic. When it comes to heavy gold chains, she will have less inventory than expected so that she doesn’t get stuck in expensive inventory that can’t be moved. She will satisfy more dedicated customers by ordering chains on memo and returning unsold ones, or those who prefer to buy jewelry in person rather than online.

She added that she sometimes struggles to get these items because of the price issues and the reluctance of suppliers to stock them. Fox points to online availability as another factor: it makes pricing more transparent, reducing profit margins for jewelers who want to stay competitive. These problems have changed compared to 10 years ago, when “it was much easier to get a heavy gold chain.” Now it’s like a double whammy.”

Mitcham also pointed out that suppliers need to be considered. “One of the things we’re more focused on is that we buy from specific suppliers whose prices change based on the current daily gold market,” he said. “Some suppliers have fairly fixed pricing and we are notified of any significant price increases, while some suppliers have costs that vary depending on the current gold price on the day. Therefore, if the gold price is higher today or this week, we may postpone placing a larger reorder until the price drops slightly.”

The Boon of the Second-Hand Market

The situation in the real estate market is different, with higher gold prices making it more attractive to sell jewelry.

“Gold is your friend,” said Tobina Kahn, president of House of Kahn Estate Jewelers, which has stores in Chicago, Illinois, and Palm Beach, Florida.

“We’ve been busy getting people to come in and sell their gold jewellery – whether it’s inherited, [never] worn, or even broken. It’s like picking up money. Kahn noted that “economic uncertainty and volatile circumstances” have prompted customers to sell their items. On May 3, gold opened at $2,042 and closed at $2,081, which was a strong incentive for sellers.

“Gold represents a new way to generate income,” she explains. Looking at jewelry boxes filled with items they don’t wear, owners may start to wonder how much they can afford to buy these items. In some cases, it may be more profitable to sell a gold piece than to repair it.

Of course, Kahn acknowledges that the price of gold is only one of the factors that determine the value of second-hand jewelry. The provenance, gemstone, designer, or rarity of a piece can “throw the mathematical formula out of the way.” Craftsmanship can also increase the value of an item.
Her goal is to “make value available to every customer who walks through the door.” Our business is a win-win situation.”