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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 08/15/2010 : 08:40:36
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I'm reading reports of world-wide gold jewelry sales tanking. Gold jewelry is a luxury in hard economic times and the price per gram of new gold jewelry is very high compared to gold bullion.
With more gold jewelry being sold as scrap and less new gold jewelry being sold more bullion demand will be needed to maintain current spot gold prices.
As a side note; I have a cousin who use to sell gold jewelry as a side line. The other day she was saying "When gold jewelry use to be in style." Gold jewelry is always in "style", it just not as affordable now.
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/15/2010 : 10:07:12
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More jewelry is not being sold as scrap, according to Jeff Nielsen of BullionBullsCanada. The amount of ounces of gold being sourced from scrap has been shrinking as the price has risen. Maybe kind of a weak hands vs strong hands situation? As far as gold demand from jewelry fabrication destined for retail markets, that's a different matter, one I am uninformed on. Let's hope investment demand can compensate for the drop. I do think with governments accumulating gold now, and the gradual awareness of the public to flee worthless FRN's for PM's with intrinsic value, that gold will continue to prove a safe haven with gradual price increases. Is the dollar going to recover? No. Is gold going to improve? Yes.  |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/15/2010 : 10:12:22
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Couldn't the jewelry industry survive by just changing the amount of gold in the objects they fashion? Alot more 14k instead of 24k items? The wealthiest shoppers are unaffected at the present level, the dropoff is most likely from entry level shoppers unable to afford even the least expensive items, deciding to save for the purchase, or wait for a price drop.  |
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metalmoney.ca
Penny Pincher Member
Canada
223 Posts |
Posted - 08/15/2010 : 10:16:01
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a woman came into my work and we (I) got talking about gold, she told me she had no more gold to sell, she had been to so many "gold parties" I told her I wished she told me sooner, I would have given her a fair price.
the number of "sell me your gold" commercials on TV is astounding.
I think beau is right, the weak hands are mostly out.
the scary part will be to watch when the weak hands get back in. that would scare me much.
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metal is a claim on future human labour. let's all go get some while the getting is good, eh? |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 08/15/2010 : 10:40:45
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The gold jewlery industry has already tried to move into even 10K gold. Over seas they have even less Ks to offer. QVC and other home shopping networks are trying to push the lower K jewlery knowing the market for even 14K is dieing. More weaker hands will develop if we continue this slid into the double dip and they too will be selling off their gold jewlery.
My wife is a profession woman but even the people she works with aren't even buying the less expensive estate gold jewlery. Instead, they are buying cheap party jewlery. Which in my opinion is a shame since it will never be worth much in the future.
I'm not trying to paint a long term bleak picture for gold prices, but there may be a big price correction coming and we ought to be aware of it so we might be able to take advantage of it. |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/15/2010 : 11:11:05
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So then... we may revert to the 16:1 ratio... the hard way?  That would place gold at $288, something I just don't think is going to happen. But it doesn't hurt to stockpile a bit of cash awaiting better prices... although we're already in the best months for buying silver and gold. Who really knows what will happen  |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 08/15/2010 : 13:50:40
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| IMHO many large investors/portfolio managers will need to BUY GOLD in the next few months for their portfolio since they have been underweighting that part for months. GOLD is not only perceived as the ultimate inflation hedge, but is now perceived as the ultimate "CURRENCY" hedge and an essential part of portfolios. We may see something surprising this fall if worldwide stock markets decline: worldwide bonds increase in value and GOLD leaping higher because of increased worldwide investor and sovereign demand. 2008 was different for GOLD as liquidation was the theme. This year, portfolio diversification using GOLD as the "CRISIS" hedge is the new theme. With a few exceptions, the general public has been fleeced of their GOLD and that GOLD is returning the affluent of this world. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 08/15/2010 : 13:59:51
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quote:
Originally posted by Country
IMHO many large investors/portfolio managers will need to BUY GOLD in the next few months for their portfolio since they have been underweighting that part for months. GOLD is not only perceived as the ultimate inflation hedge, but is now perceived as the ultimate "CURRENCY" hedge and an essential part of portfolios. We may see something surprising this fall if worldwide stock markets decline: worldwide bonds increase in value and GOLD leaping higher because of increased worldwide investor and sovereign demand. 2008 was different for GOLD as liquidation was the theme. This year, portfolio diversification using GOLD as the "CRISIS" hedge is the new theme. With a few exceptions, the general public has been fleeced of their GOLD and that GOLD is returning the affluent of this world.
That an interesting point. The affluent historically have held the gold of the world. The general public couldn't wait to sell off grandma's wedding ring so they could have a night out on the town. Maybe a few paid off some debts, but I believe not many.
But for gold to be a currency hedge then the currency has to be perceived to be in trouble. If the public is trying to scrape up cash then the problem they will see is not a problem with the dollar but rather a problem obtaining dollars. |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 08/15/2010 : 14:12:21
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The viewpoint of the general public seems to be: "How can I get by, what can I sell?". The viewpoint of those who are affluent is different: "How can I maintain the buying power of the assets I own?". The general public cannot afford to keep their GOLD; daily needs will come first. GOLD should flow to the affluent who are protecting their wealth.  |
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The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
– Theodore Roosevelt
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Edited by - Country on 08/15/2010 14:14:25 |
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carterandsabina
New Member
USA
16 Posts |
Posted - 08/15/2010 : 19:16:48
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| Gold is in a really strange place right now. I would consider it over bought and looking at a correction but at the same time world economies are unstable and gold is the perfect haven for instability. I have heard from several sources that we will know a lot more about gold demand as we enter Sept and Oct. These months are tradionally the marriage season in India and gold demand often spikes. I am still buying on dips and selling on moves up. |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/15/2010 : 21:58:09
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quote:
Originally posted by carterandsabina
Gold is in a really strange place right now. I would consider it over bought and looking at a correction but at the same time world economies are unstable and gold is the perfect haven for instability. I have heard from several sources that we will know a lot more about gold demand as we enter Sept and Oct. These months are tradionally the marriage season in India and gold demand often spikes. I am still buying on dips and selling on moves up.
Is that working for you? Have you been able to obtain more ounces since you started? The only danger with trying to profit by timing is you might be sidelined in cash when the price decides to make a significant run to the upside. I still buy dips, but only to add to my core position... which I won't sell till it's multiples higher, silver or gold  |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 08/16/2010 : 10:12:07
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A comparison of silver jewelry statistics drawn from the Silver Institute's Annual report:
"World jewelry demand in 2009 fell to an 11-year low
of 156.6 Moz (4,870 t). The fall was driven by the
recession–led dip in consumption in jewelry’s core
markets of the industrialized world, as well as heavy
de-stocking at the trade level. The greatest losses were
seen in Thailand, Mexico and the United States. That the
year-on-year percentage loss was kept to just 1.1% was
mostly thanks to India, where fabrication rose by 37%.
This increase was, however, mainly caused by restocking
at the trade level, as final consumer purchases grew only
modestly. In addition, China saw healthy gains, as strong
GDP growth boosted domestic consumption." |
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carterandsabina
New Member
USA
16 Posts |
Posted - 08/16/2010 : 19:01:50
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| its working pretty well. I always try to add a little more than I sell! I feel silver, and copper, are undervalued in their ratios to gold. To me, that makes them a safer bet and gives them more upside. I also think that both are very important for the continued industrialization of Brazil, India and China. Also, as the middle class grows in those countries I expect silver will become more in demand before gold does. |
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Gold Jewelry Sales are Tanking.
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