[Jewelry making - Article 00339] - Re: [Orchid] Rising Costs Of Precious Metals

[bruce holmgrain]

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>     I'm wondering about the thoughts of others regarding the spiraling
>     costs of precious metals. I only deal in sterling silver, but as I
>     watch the cost of gold at $535.00 oz., sterling jumping to $9.04
>     yesterday, and I haven't even looked at platinum, I'm wondering
>     how this is affecting those that deal in the more expensive
>     precious metals. I read an artical this morning written by a man by
>     the name of Harry D. Schultz on The Chicago Market Watch, who
>     supposedly has been a gold "tracker" for some 40 years.It was his
>     belief that gold will climb to $950.00 oz. "before the run is
>     over". If this is so,what will happen to say sterling silver and
>     platinum, and how will this affect all silver and goldsmiths?
>     Especially worrisom I would think since many are struggling to
>     survive now. I'm not trying to create any more worries, just
>     wondering if he knows what he's talking about and the thoughts of
>     others on this matt 

    I started working in gold in 1970. I worked in a trade shop that
    serviced 180 accounts in the Washington, DC area. As I recall, I
    could purchase a foot long strip of 5x1.5mm flat 14k wire for about
    $25. I believe that I paid about $4.50 for silver in high school. At
    that time sale of bullion was restricted to those that needed it in
    their business. We started to see a rise in price over the next
    couple of years as the dollar was floated against other currencies
    and the gold market was freed up to the general public. When gold was
    finally freed, it topped out at $160-165, I don't remember exactly.
    Myself and some friends had made an investment. At that point, gold
    started to tumble. I don't remember the low, but it took a couple of
    years to reach that point again when the Hunt brothers attempted to
    corner the silver market. Gold reached $850. Silver got to just about
    $50. This was a bubbly time and sure enough, it all collapsed. It has
    been a long time since then. A whole new generation of investors is
    now playing. Who could know what will happen? 

    During the last run, I started looking into a local precious metals
    license. I think that there was an unusual number of burglaries and
    a quick re evaluation to the current laws pertaining to the black
    market in precious metals. I had a trade shop based in a chains
    central store back then and although I was afraid of how this would
    affect my business back then, I don't think that there really was
    one. I continued to grow my business and all was good. In the years
    following other factors have come into play, bit the run up in metals
    prices has had little effect. I think that it is much more important
    to understand the labor market. I sell my labor. That is all that I
    have, really. There is a little metal trading going on, but my
    business is really just about my time. 

    As for what we should expect now, I expect no great change. Perhaps
    increased sales. Perhaps just an ability to raise my prices. I
    suspect that overseas manufacturers will have a greater problem as
    the metalcost/labor ratio changes. It might improve the appearance of
    US labor. That is surely what drives the bigbox stores and chains. 

    One note. The real, overall price of silver seems to be too cheap to
    me. It sells now for little more that I paid for it when I was in
    high school. 

Bruce D. Holmgrain
JA Certified Master Benchjeweler	
Goldwerx
http://www.goldwerx.com

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