In Manhattan's famed Diamond District, Chris Carlson walked out of a store empty-handed. Gold jewelry won't be on her shopping list this year, she said.
"A little of the reason I'm not even considering it is because of the price increase," said Carlson, visiting from Omaha.
Jewelry is more expensive due to the sharp run-up in precious metals prices on world markets over the past few months
-- an ounce of gold that cost $680 in mid-August has surged close to $850 before back-tracking somewhat. While daily market swings don't immediately affect the price of, say, a gold wedding band, jewelry prices do reflect longer-term trends. And gold, rising on worries about high oil prices and inflation, has returned to levels not seen since 1980.
Although there are few signs of the frenzy that characterized the metal's last foray above $800
-- no one is queuing up to sell their jewelry -- some consumers are having second thoughts.
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Susan Raque, shopping along Chicago's Magnificent Mile district, said she regretted not buying a gold necklace when the price was $500 an ounce not too long ago. Now, she may just have to wait and save.
"I'd definitely think twice about it if it (the price) were over the $500 mark," the Louisville, Ky., resident said. "I'd just wait it out a bit and save my money."
It's true that gold at $800 gold isn't the eye-popper it was in 1980
-- an $800 ounce of gold then would be worth more than $2,000 an ounce today, adjusted for inflation. But the more gold in a piece of jewelry, the more shoppers will have to pay, and the more some of them will say no.
People who want "a heavy gold necklace or a heavy gold bracelet, and they shopped a year ago, they'll see a big difference" in price, said Jimmy Pesis, owner of Continental Diamond near Minneapolis.
For example, a man's heavy gold signet ring that cost $500 before the run-up could cost $700 or $800 today, according to one jeweler.
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Jewelers are watching the price warily, knowing that while no one can predict what direction gold will take, it could indeed move higher. And while they know well-to-do shoppers will always buy luxury goods, they worry about the shopper with just a few hundred dollars to spare.
"The middle market guy is gone," said Steve Greenberg, president of IMG Jewelry, a jewelry store near Cleveland. "The guy who had $500 to $1,000 to spend is gone. He's paying for gas and food."
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![](../images/ads/current/eagle_one_inv-lda091007.png) A slowly rising gold price can be good for jewelers, allowing them to nudge prices higher. But gold surged nearly $200 in less than three months, a pace that makes it difficult for jewelers to manage inventory and convey to customers why prices are changing so rapidly. Platinum prices, meanwhile, are also up about $200 over the same period.
If consumers shy away from gold, smaller jewelers could be hit the hardest
-- they're likely to see shoppers migrate to big-box retailers such as Wal-Mart Stores Inc. or department stores like Macy's Inc. The big merchants are able to offer lower prices because of the huge volume of gold that they buy.
Higher gold prices don't stop shoppers from buying, "but you may have a customer rethink what they purchase," said Bill Elebash, who runs the jewelry retailer Elebash's in Pensacola, Fla. "They may still buy in the $500 to $600 price range, but they won't buy in the $1,000 price range."
Mike Ziang and his fiancee have set a budget for when it comes time to buy their rings and they don't plan to raise it because of the more expensive market.
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Higher gold prices "absolutely" have an impact on their decision-making, said Ziang, an accountant, who was doing some early holiday shopping in an upscale Chicago mall. "It's not the main part of the decision, but it's part of it."
"We set a budget, and if gold doesn't fit it, we'll make do" without it, he said, suggesting they'd get a smaller piece instead.
On Jeweler's Row in Philadelphia, Ernestine Hart studied a gold necklace-and-earrings set that glittered in a store window. Such a purchase would have to wait for a sale, she said, because prices have gone up too much.
"It's very expensive, too expensive for me," Hart said.
[Associated Press; By LAUREN VILLAGRAN]
AP writers Dave Carpenter in Chicago and Deborah Yao in Philadelphia contributed to this report.
Copyright 2007 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
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