Obviously, the rising price of gold couldn’t come at a worse time for the industry – with the exception of manufacturers melting pieces into scrap, and retailers buying back gold.
So consumers will probably get less for their money for the holiday. The question is: Will they notice … or care? I would guess that, if a consumer has their mind set on buying jewelry, the size of the piece would not be a big deal. But if they are forced to switch from gold to lower price point goods, that is something that could have an impact on their purchasing decision.
Speaking of the holiday, an article in the New York Times today quotes Michael MacNamara, vice president for research and analysis at SpendingPulse, a division of MasterCard, jewelry sales increased, marginally, in September. However, his enthusiasm was pretty tempered …
In an interview this week, Mr. MacNamara explained that in a sector like jewelry, for instance, sales increased 1.2 percent in September. “But that is still about 5 percent lower than we were in September 2007 and about 10 percent lower than the sector was in September 2006,” he said. “In some respects the sector has turned the clock back to 2005 sales.”
Even so, SpendingPulse recorded jewelry drops of more than 20 percent last Christmas, so we are clearly moving in the right direction. But with the gold price rising so substantially, it would be interesting to know if the number of pieces sold has risen, or just the average price of those pieces.