Friday, March 14, 2008

Are You Feeling The Crunch Yet?

Jewelry buyers and jewelry makers…be ready for sticker shock. Prices on basic supplies are rising, fast – and forecasts are for that trend to continue. Gold, silver, gemstones…all rising. Even less-expensive materials like glass, base metal, and acrylic should increase in the next few months. Here’s a look at why.

Gold prices: If you’ve tried to buy gold or silver (sterling) components this month, you already know what I’m talking about. In the past SEVEN MONTHS, the price of gold has risen from about $650 per oz to today’s high of $1000 per oz. That’s a 54% increase. FIFTY FOUR PERCENT…that staggers the mind. Just for some perspective, it took about 30 months for gold to rise from $420 to $650 (again, 54%). If you aren’t shocked, go read that again.

Silver prices: Ok, so gold is obscene, which is partly why sterling silver is very popular in jewelry right now. Silver is currently trading at just under $21 per oz…which seems cheap compared to gold, certainly. Still, when we look at historical data, silver has risen from $13 per oz a year ago, to the current $21 per oz – again, a 54% increase! And considering the price actually dropped in the summer, if we compare the August 2007 price of $11.80 per oz to today’s value, that increase jumps to over 75%. Again, over the course of just SEVEN months.

Other metals are having the same increases in price - including aluminum and steel, which are the components of most "base metal" findings. And don't even ask about copper - the recycle market is high enough that thieves will risk their lives to get some!

The fall of the US Dollar: If you live somewhere other than the US, ignore this part – it’s actually helping you a little. For all my American readers, however…in case you haven’t heard, the value of the Dollar has been plummeting. At the moment, 1 USD is worth just 0.64 Eurocents. 64 cents! Ouch. And the fall in value is not just with Euros – it’s close to across the board with other currencies. So those made-in-China items that you can get so cheap are going to be less cheap. Hey, it’s a good reason to buy American again! (Shop Etsy for supplies – great deals)

Rising Oil prices: Welcome back international readers – this one affects YOU too. As the price of crude oil rises, we see the prices at our local gas stations rise too. Guess what – all your suppliers (big and small) get hit with the same increase. It costs more to transport your goods, whether done by car, boat, or plane. And that pain will be transferred to you, in higher prices for goods or increased shipping costs.

So how can you deal with this? Shop local, whenever possible – this reduces the transportation (oil/gas) costs of your material. Buy in bulk for discounts. See if you can join other local artists to get even larger wholesale discounts. Beyond that…unfortunately, there’s not much a small buyer or seller can do.


Sophie said...

Oh my! I had no idea how much all this stuff can affect everything like jewelry making. Brilliant awareness post and wonderfully written.

TexasTesla said...

Thank you Sophie! It's hard sometimes to take all the different bits of news we hear (oil prices, etc) and make it apply to our lives...yet it definitely impacts us.

The Beading Gem said...

Great post! I totally agree. Our grocery bills are rising because so are oil and other commodity like wheat prices. I am not looking forward to when I order bulk silver again...

"Frank" Franklin said...

We at the Jewelry Recycling Centers of America are beginning to hear tales of brazen robberies and burglaries relating to jewelry and the rapidly increasing values for precious metals. Simply put, it's paying off for criminals to steal the jewelry of others. Including bodily snatches of items like gold chains.

My own 14K gold chain weighs 27+ grams. At today's gold value I can melt this anniversary gift, given to me by my wife 24 years ago, and receive nearly $500. Fortunately I'm not forced to sell this precious gift at this time (and pray I'm never "forced" to do so). However, given the state of the economy and the housing crisis faced by many, it's abundantly clear many people are in, or approaching, personal cash flow problems and selling their unwanted jewelry is a viable option.

We're seeing increasing interest in jewelry recycling due to these economic issues.


Nicole Solo said...

I wish this were required reading for all our customers as well! I have a huge stock of silver findings that I'd marked with price each, and now I have to literally double that to calculate the actual value today.