Precious and Pricey

By Carly Harrington, The Knoxville News-Sentinel, Tenn.

Feb. 14–Terry Gilliam of Churchill, Tenn., knew gold prices were at record levels, but that wasn’t going to deter him from buying jewelry for his girlfriend for Valentine’s Day.

“Money is always a concern, but girls like gold, and they like diamonds,” Gilliam said Wednesday after purchasing a pair of gold earrings from West Knoxville’s Gemstore by Jewelry Television, a stand-alone retail store owned by the 24-hour shopping network.

Prices for gold and platinum are at record highs during a time when consumers are dealing with higher energy costs, falling home values and a weak economy.

While some may cut back on Valentine’s Day gifts, Randy Sadler, vice president of marketing for Knoxville-based Jewelry Television, said people who want to buy jewelry are still going to buy jewelry. They may, however, move away from gold and platinum toward diamonds, pearls, watches and other, less-precious metals.

And some retail prices, he said, don’t reflect the surge in price because jewelers may have an inventory dated prior to the increase.

“We’re probably positioned better than our competitors because we’re better diversified,” said Sadler, who believes commodity prices will come down after the November presidential election. Gemstore specializes in gemstones, but also offers gold, silver and diamonds.

In response to the higher gold prices, Jewelry Television launched a new line of jewelry last fall called Luxury Lite. The catch: While pieces are still 14 karat or 18 karat gold, they are hollow instead of solid.

“It’s a real big look for not a lot,” Gemstore sales associate Lance Lawhorn said of the collection. “You can give her something gold with gemstones at a fraction of the cost.”

Randy Williams of Markman’s Jewelers said Valentine’s Day is one of the store’s busiest days of the year. He expects customers will still buy but will perhaps trade down a diamond size.

“Everyone is real conscious,” he said. Sales of “the high-end merchandise has been reduced.”

While the price of metals is part of the discussion that Markman’s sales people have with customers, Williams said people are still buying but they are more careful about what they spend.

“It’s like gourmet coffee. People who want coffee still get it, but instead of going to Starbucks, they go to McDonald’s,” he said. “People are just more cautious with their money. They ask more questions. They’re less cavalier with their purchase than when money is flush.”

And jewelry, Sadler said, has a certain appeal that sort of defines a couple’s relationship as “real.”

“If he gives you a piece of jewelry then you know it’s real. And if he gives you jewelry at a time when prices are higher, then you really know he’s serious,” Sadler said.

Though he hasn’t been dating his girlfriend for very long, Chad Pressley of Knoxville said he opted to buy something silver.

Jewelry, he said, is “easily accepted. She’ll love it.”

BY THE OUNCE

–Gold: $904.70

–Platinum: $1986.00

–Silver: $17.21

Source: Kitco

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