Gold prices were held stable on Thursday, hovering close to the record for the day before, helped by expectations of American prices and political uncertainty.
David Gray | AFP | Getty images
In the middle of global economic turbulence, precious metal prices have climbed more and more.
The price of gold In particular, has skyrocketed in the past year, increasing by more than 50%. For medium -sized jewelry companies aimed at offering fine gold necklaces, earrings and more At lower prices than inherited luxury jewelry brands, gold -term contracts could be spelling problems.
Although gold is often subject to market fluctuations, investors have increased their assets in the past year, recession and market uncertainty, according to Goldman Sachs. Gold is in pace for its third consecutive year of two -digit gains, with record peaks this week when the government is closed.
On Tuesday, gold prices reached $ 4,000 per ounce for the first time in history – and they show no signs of slowdown.
UBS analysts wrote last week that the drop in interest rates, the low dollar and political uncertainty will only increase the price of gold.
“We are now expecting entries for this year at 830 metric tonnes, which represents almost double of our initial forecasts of 450 metric tonnes at the start of the year,” wrote UBS analysts in a note. “The key risk of gold is better American growth and if the Fed is forced to increase rates due to the upward surprises linked to inflation.”
A Goldman Sachs report from the end of the month predicted the rise, providing that the price of gold will increase by 6% until the middle of 2026 to 4,000 $ 4,000 per ounce Troy, a unit of measure used for precious metals. The report has classified gold buyers in two groups: buyers of conviction, who buy metal in a coherent way, and opportunistic buyers, who jump in “when they believe that the price is right”.
Analysts said they expect central banks to continue to buy gold for three more years.
“Our justification is that the central banks of the emerging market remain in clearly weighted insufficiency compared to their market -developed market counterparts and gradually increase the allowances within the framework of a broader diversification strategy,” wrote analyst Lina Thomas.
And according to survey in July of World Gold Council, around 95% of central banks expect Global Gold Holdings to increase next year.
Gold future
This uncertainty occurs from an already turbulent global economy in shock from President Donald Trump’s pricing policies. Although it clearly indicated in August that gold will not be a pricing and that the Swiss bars will not be subject to the rate of 39% of the country, the high rates of Trump on other countries have disrupted the world supply chain.
For jewelers, the rise in the price of precious metal can be a source of concern. Large retailers like Pandora and Seal pointed out that they explored price increases or alternative manufacturing methods to counter the blow they draw from gold.
And some jewelry companies aimed at offering gold products at lower prices, such as Mejuri, also feel pressure.
Mejuri, which aims for sale Gold and luxury jewelry at more affordable levels than its competitors, announced last month that the company was forced to increase its prices due to the increase in the cost of gold, money and prices.
“While we have done our best to absorb the impact and preserve the quality and crafts that you expect from us, you will see up-to-date prices on Monday September 29,” Mejuri wrote in an email to customers. “We attack these front changes: rationalization of our supply chain, strengthening supply and design taking into account prices.”
The company said that it also innovated new products like 10 Karat Solid Gold to continue to offer quality jewelry at affordable prices. Mejuri refused to comment.
‘An indicator of fear’
With the price of gold which increases and showing no signs of stopping, certain jewelry companies are forced to be innovative with their prices and their products.
In his report on the profits of the second quarter in August, Pandora said that he had faced a point of 80 bases due to the rise in gold and money prices and that he had planned price adjustments to compensate for these opposite winds. And when calling the most recent bookmark in early September, the company said that sales decreased by 7% over a year, mainly due to an increase of more than 30% in the cost of gold.
Baublebar, specializing in fine jewelry, offers a large selection of “half-fine” gold coins, which, according to the co-founder, Daniella Yacobovsky allowed the company to avoid the crude pressure of gold prices.
The semi-finished jewelry of the company is equipped with a thick and 18 km high quality gold on a sterling silver basis, which allows Baublebar to avoid the costs associated with solid gold jewelry. The brand half-end earrings vary between $ 50 and $ 150.
“We have actually noticed a really enormous increase in the interest in half-food,” Yacobovsky told CNBC. “I think it offers people a really fantastic alternative to solid gold. … You will get a really fantastic quality similar to that for a lower price.”
However, Yacobovsky said it was worrying that important events affecting the world economy occur at higher rates than five years ago. She said that she didn’t seem something as volatile as the arrow price of gold in the “long” industry.
The key, she said, will be for companies to capitalize on their ability to make intelligent choices.
For Alexis Bittar, CEO of his eponymous jewelry company, The Smart Choice meant looking at gold plated parts, allowing the company to save costs on solid gold and slightly increase prices to match the products that arrive.
But the company does not repaint any of its existing products, said Bittar.
“You are constantly juggling between the price and the acceleration of gold prices, so you stay in a price for which you are known,” said Bittar. “On the consumer side, they don’t really care. They vaguely know that gold prices are increasing … but mentally, they have an unconscious price that they seek to spend, and when you start to exceed it, you assess people.”
Bittar said that his business saw a “cautious” consumer, but that any decline in expenses is probably more linked to solid gold than plated gold, and that the rich consumer base is more ready to pay higher prices than lower or average income buyers.
Even for the Rowan ear drilling company, which also offers gold jewelry, rapidly evolving industry can be spelling problems. The CEO, Louisa Schneider, told CNBC that it was difficult to imagine any other industry whose costs of raw materials had increased as considerably as gold.
Rowan piercing studio suburban location in Ardmore, PA.
With kind permission: Rowan
Since the drilling of the ear requires a certain level of surgical steel or titanium for ideal healing, Rowan often uses 14 -carat gold to cover these materials, leaving the “somewhat isolated” company from the growing price of gold because it is necessary to maintain certain standards of health and safety.
However, Schneider said that Rowan had to increase prices on some of his gold coins at the beginning of the third quarter, which said that customers were ready to pay because the company specializes in the employment of qualified nurses for piercings.
“It is an indicator of fear. So, from my point of view, is quite worrying,” said Schneider. “Our expectation is that we do not see a significant reduction in current prices – if anything, we expect gold to continue to be quite expensive. We will therefore continue to cover ourselves and work very closely with our suppliers.”
Schneider said that she saw a “inflection point” in the price of gold and that it is a source of concern for all jewelry companies, but especially those that are unable to increase their prices to counter costs because they sell non -luxurious consumers who are less flexible with price changes.
In the end, she said it served as a warning panel for the wider economy, even if it did not hit Rowan too much.
“The demand does not come from consumers who wish to wear gold or industries that require gold as a component of manufacturing,” said Schneider. “It comes from a hoard of gold given an uncertainty around the American dollar, and it is different from everything we have seen.”