It’s the dream of every jewelry consumer: purchasing a beautiful gold jewelry item without having to worry about the impact it will have on a monthly budget. At the end of July, that’s precisely what some consumers were able to experience as the price of gold dropped to an amazing five-year low. As reported by one news channel in Georgia, this AZ jewelry appraiser found that some customers were able to purchase jewelry with as much as a $50 savings on one item alone, an impressive feat for anyone looking to add to their collection.
REASONS FOR A PRICE DROP
By early August, gold dropped below $1100 per ounce, which turned into a significant drop from the metal’s peak price in 2011 at $1,900 per ounce. So, why did the price drop so much? Our AZ jewelry appraiser learned that the Federal Reserve raised interest rates over the summer in an effort to help vitalize the US economy.
Gold has traditionally been used as a way to secure financial status and during the Great Recession many investors turned to it as a method of protecting their finances should inflation rise. Once the recession began to wane, the price of gold continued to rise to its peak price as interest rates from the Federal Reserve lowered. However, that didn’t necessarily bode well for gold investors as gold prices began to drop this year.
Some also argue that the price drop was also related to the amount of gold being purchased by Indian and Chinese citizens. This AZ jewelry appraiser learned that because of the large gold market in those countries–India, for example, was expected to consume upwards of 1,000 tons of gold this year alone–they have a major influence on the gold prices. However, since their consumption dropped earlier this summer, the demand lessened and so did the prices.
BACK UP…THEN DOWN AGAIN
However, by mid-August the price of gold began to rise again and reached another peak price at just over $1,160 before beginning to drop again. Today gold is priced at $1,125 per ounce and this price is estimated to continue dropping this year but not so much as early 2000 gold prices (which were under $500 per ounce).
WHAT THIS MEANS FOR YOU
Although the rapid fluctuation in gold prices may not be such great news for investors, it does translate into such for AZ jewelry appraiser consumers. The continued drop in prices and the lower demand for gold worldwide does mean that purchasing jewelry can be more cost beneficial for those looking to either add an extra pair of earrings for daily wear or even for those looking to accumulate more investment pieces. As reported by some in the jewelry industry, you can end up spending well under $100 for an item that would normally cost upwards of $150. If there’s any time to add gold pieces to your jewelry collection, our AZ jewelry appraiser recommends now while the price per ounce continues to drop.