Gold prices hit a record high Monday, but John Henne, owner of Henne Jewelers in Pittsburgh’s Shadyside neighborhood, said he does not feel worried about the jump impacting his family’s business.
“The customer is very resilient,” Henne said to TribLive on Tuesday.
He joined other local jewelers and gold buyers who say they are accustomed to the market’s fluctuation and are taking it in stride.
On Monday, gold prices were up 2%, topping more than $5,000 per troy ounce, while silver jumped 8.6% to around $110 per ounce. (A troy ounce, the standard unit of weight for precious metals, equals about 1.1 regular ounces.)
Founded in 1887, Henne Jewelers has “been around long enough to see big spikes” in fine metal prices, said Henne, a fourth-generation member of the family business.
The price increase does sometimes cause some surprise when a customer comes into the store to buy a more “regular” item, such as a gold chain or cross, Henne said. But if customers have a specific gift in mind, they will generally shift their budgets to accommodate the price of the item.
Jeremy Gugino is co-owner of Community Gold & Jewelry Buyers in New Kensington. He said the price change will impact people trying to sell gold bars and coins more than jewelry because it is priced on a dollar-to-dollar amount, which means that for every $1 of cost incurred the price is adjusted by exactly $1.
The last major surge in gold market prices happened in October, when a troy ounce of gold reached $4,000 for the first time.
During this time, TribLive reported the skyrocketing gold prices resulted from factors such as inflation, the federal debt and geopolitical instability.
James Maloy, who teaches economics at University of Pittsburgh, said the current price jump could stem from a multitude of factors, including a need for industrial metals such as bronze, gold and silver as well as concern about global currency issues.
Increased concern over currency leads people to purchase gold and silver as a way to protect against financial loss, which in turn drives up the market price, Maloy said.
Gold and silver are subject to both investment and industrial metal demand within global markets.
Gugino said the last rush to sell gold took place over the holidays, following a price surge. But he doesn’t anticipate the same reaction this time. He believes sellers are being cautious and might be holding out for an even higher price before selling, but does advise customers to capitalize on the market now.
“It is a gamble … this is a worldwide market,” Gugino said. “What goes up must go down.”
Historically platinum used to be the more expensive metal in comparison to 14 karat white gold– now Henne said purchasing the same item would cost roughly 10-15% more in 14 karat white gold than it would in platinum.
Despite prices jumping up on Monday, Henne said many of the gold and silver jewelry items in his cases are marked with tags from when they were last inventoried, meaning that buying jewelry pieces from current inventory rather than ordering new is a better value.
“Anything I order now has the current (metals) price,” Henne said.
If the price of gold and silver remains higher then over time jewelry stores’ inventory costs will begin to rise, he said.