Spot price - Jewlery.

MLP

MLP

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I have seen many high end items of jewelry for sale lately where comments have been made refencing the rising spot price of gold in relation to the value going up.

My question is: "Does the spot price of gold really effect the value of high end jewelry or is it sellers trying to push the price up?"

I have seen jewelry for sale for six figures that might have ten or twenty grand worth of gold in it. My thoughts are for example a new Toyota Landcruiser with a bull bar, lights tray etc, etc could be $100,000.00, but, honestly the raw materials in the vehicle would struggle to make up 10% of that price tag. To be truthful, a rise in the price of iron ore (spot price more or less) has little effect on the total cost of the vehicle.
 
I'm not sure how much (if any at all) of the retail price of jewellery depends on the current spot price...
I'll put it this way - your average gold ring (not counting signet rings or those with diamonds or any other stones, because that's not comparing apples with apples) has a total mass of approximately 1.8-2.7 grams. This could be of 9k/14k/18k, it's all basically the same weight margin.
Now, I haven't currently laid eyes on the spot price of 1g 24k gold, but I'm going to throw out a ballpark figure of around $80/g. If I could find any actual gold rings for up to $240, I would snap those up in an instant.


As you say, the raw materials may well only amount to 10-25% of the retail price; how much extra is broken down into what percentage of middlemen, manufacturing costs, vendors is anybody's guess...
 
The higher the premium above spot the item has the less it will be effected by the floating price of the metal (gold, silver, platinum).

The value of the precious metal will always put a floor on the value of the item but the ceiling is between the buyer and the seller.. if people want to buy a gold necklace for 10 times the value of the gold then it is speculation that the item will hold its value over spot - imo when you go to sell it expect a massive haircut as pawnbroker's tend to give you spot for jeweller regardless of how much it is valued by a jeweller.

Therefore the difficulty will usually be getting the premium back which would almost certainly involve some great marketing and a decent sales platform.. usually this implies additional time, money and expertise to realize full value.
 
I think that most buyers on this forum consider spot when buying, and aim to buy at close to spot. I also expect you would never get spot from a second hand dealer. Those bullion buyers at the shopping centres are only paying 50% spot.
 
Jewellery as a means to get investment exposure to precious metals is as clever as buying old license plates to get investment exposure to classic car market.

apples and oranges.
 
Very rare to see high end jewellery being offered on SS
By high end we are talking 50k+ starting price right?

Or rare Tiffany, Cartier,Harry Winston, Buccelati, Rolex etc
And no spot has nothing to do with high end jewellery prices as there is only so much gold and silver you can fit into a piece of jewellery thus limiting its exposure to spot fluctuations.
The heaviest Cuff I have in my possession I think from memory has 13oz of silver in it but its not high end and would be linked to the spot price of Silver to give you a base perspective.
REDBACK
 
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