Editor’s Note
As economic uncertainty grows, nervous investors are turning to gold as a safe haven, driving prices to record highs. This surge is now impacting consumers, with Canadian jewelry retailers raising prices in response.
Nervous investors are driving up demand for gold, and Canadian jewelry retailers are feeling the squeeze. Some Canadian jewelry brands are raising their prices as a surge in demand for gold — incited by investors’ fears of a shaky economic outlook — pushes the market for this precious metal to record highs. With confidence in the U.S. dollar eroding, and uncertainty weighing on the global economy, more investors are looking for a safe place to park their money. So they’ve been buying gold in droves, sending market prices soaring for jewelry makers who might then pass the extra cost to their customers.
said Melanie Auld, the Vancouver-based jewelry designer whose eponymous online business makes gold-plated jewelry with a sterling silver base.
Gold prices have surged as high as $4,300 US per troy ounce (the measurement used when weighing precious metals) in recent weeks after years of gradual growth. Auld said silver prices are also shooting up — and the combination isn’t sustainable for her business.
she explained.
The company is now offering less fine jewelry — which customers were increasingly turning away from due to its higher cost, says Auld — and focusing on moderately priced materials like wood, leather and stone to make the chunkier statement jewelry that is now on-trend.
said Auld. She doesn’t foresee gold prices coming back down.
Another well-known Canadian jewelry brand recently raised its prices to account for higher gold costs. Toronto jewelry retailer Mejuri, which became popular for selling rings, earrings and necklaces at relatively accessible prices, emailed its customers last month to inform them of an increase.
Mejuri co-founder and CEO Noura Sakkijha wrote in the email.
she added.
The company raised prices on Sept. 29, including for several of its bestsellers. For example, the brand’s letter necklace, which originally retailed at $348, now goes for $368; its 14 karat yellow gold mini hoop and 18 karat gold vermeil dome huggie earrings were $78, and both now cost $98.
Meanwhile, big American jewelry retailers like Signet, Pandora and Tiffany & Co. are expected to hike their prices or shift their manufacturing strategy by the end of the year, if they haven’t already, according to analysts.
Other jewelry brands are taking a different approach for the time being. Toronto-based online retailer Jenny Bird is relying on supplier discounts and strategically-timed shipments to manage higher costs, according to Priti Kapoor, the company’s chief operating officer.
Kapoor told CBC News.
She added that she’s confident Jenny Bird will be able to withstand higher gold costs.
Reena Ahluwalia, a jewelry designer based in Toronto, said she’s looking for different ways to manage costs — including using lighter-weight gold and studding her designs with coloured stones.
The demand for gold isn’t going away, and the industry needs to adapt accordingly, she said. But not everyone in the jewelry market is feeling the pressure equally.
she said.