This past Monday saw the largest ever gold price drop. It did start to rise again on Tuesday. This is probably all my fault. I had a piece of 22K gold cast on the previous Wednesday, when gold was $1500 something, and sold all my scrap gold on Monday during the drop at $1390. So of course it went back up.
This got me thinking, how significantly does a drop or rise in gold price like that affect the price of a piece of jewelry? A $125 drop makes the price of 14K gold jewelry change approximately $6-$9 a pennyweight. A ring may weigh 1 to 5 pennyweights. The price drop was, however, short lived, so it will have little effect on the price of jewelry. In our industry the fluctuations of gold, both up and down, even as large as $125 are largely absorbed by the manufacturers and/or the jewelers, with the exception of heavy pieces.
One of my fellow jewelers was saying, “If you think about it, gold was about $350 an ounce(T) in the 1980’s, and it stayed around that price until 2002. If you think about it, gold was seriously undervalued.