Towards the end of last month, the price of gold hit a new high of over $1,260 an ounce. I was going to explain the economic and political reasons for the increase and examine its implications but I had a vision of y’all searching your Poodle Reader for something more interesting … maybe the blog of a 20-something “effortlessly chic” fashionista. I imagined you admiring the 10 photos she’s posted of a single outfit composed of the shortest of short shorts, the highest of high heels and a side-boob-revealing tank top. In this outfit, she’s crouching artistically in a windswept parking lot, pouting into the adoring lens of her almost-professional-photographer boyfriend. I saw her beauty turning you into jellus h8er who leaves her a nasty anonymous comment telling her she’s fat, anorexic or skinny-fat.
Well! I certainly don’t want you lashing out like that, so I’m just going to give you some quick and easy insight into what the high price of gold means. It means that 16 inches of heavy 18K gold chain that I bought wholesale for $255 in 2006 and $444 in 2008 now costs $530 (excluding clasp). That’s up 19% in the past two years and more than double the 2006 price.
I’ve educated you about costs before, so you should know that for me to make enough money to stay in business, I must at least double my cost when selling to a store. For the store to stay in business, it needs to at least double its cost. That means that 16 inches of chain alone is worth $2,120 at retail — and that’s still excluding not only the cost of the clasp, but the cost of the pendant, the packaging, the photography, the time I’ve spent writing this educational post, and so on.
I (like many other jewelers I know) have barely raised the prices on my older gold designs. It’s hard to pass along such big increases to the customers during tough economic times. But I’m finally going through my website to increase prices on most of my gold jewelry designs by about 10% — even though the cost of parts has gone up much more. In other words, my jewelry is a total steal, especially pre-price adjustment. Buy some and you’ll look beautiful and thrifty. And, hey, if gold goes up past $2,000 an ounce like some people predict, you can melt down the jewelry and make a nice little profit. You can’t do that with Nicholas Kirkwood for Rodarte heels! So start gathering the spare change out of your sofa cushions, your kid’s piggybank and/or your mother’s purse and come back tomorrow when, for 24 hours only, I will have one fabulous gold piece on sale for half off the 2008 price. The price is criminal … it’s insane … it’s criminally insane! Arkham Asylum, here I come.
UPDATED TO ADD: What timing! Early in the trading day, gold has dipped below $1,200 an ounce for the first time since May. That doesn’t mean I’m not going to raise prices as planned. Gold would have to fall below $800 an ounce for my current prices to reflect my costs. So why is gold lower today? It’s obvious: I was taking some scrap metal to be sold today. Of course gold is lower the day I’m selling instead of buying. I’m going to take credit for this whole thing.