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Big Survey

Here’s What Surging Gold Prices Have Meant for Jewelers

2020 was more a case of low-grade gold fever.

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Question: What proportion of profit does gold buying currently account for?
Big Survey 2020 graph

THE SURGE IN gold prices this year has brought windfall profits for some jewelers, caused sticker shock at others and made inventory replacement a scary decision for just about everyone. But it has also allowed a significant number of jewelers to keep their doors open.

This comment from an Oklahoma jeweler was typical: “Not only have people wanted to sell, I decided to scrap about $40K worth (at wholesale) of old semi-mountings, and the cash infusion helped us make payroll twice after the PPP funding ran out.”

In all, 30 percent of jewelers told the 2020 INSTORE Big Survey that they had boosted their gold buying off the street this year, while 48 percent said it hadn’t increased significantly (the remaining 22 percent don’t trade gold). From a little over $1500 an ounce at the start of January, the price of gold spiked to more than $2,000 an ounce in August.

Gold trading typically picks up when the economy turns down, as investors pile into the yellow metal, boosting the price, and consumers look to raise cash. Back in 2009, in the middle of the Great Recession, 45 percent of jewelers told us that close to a half or more of their profit was coming from gold trading. That compares to just 2 percent in 2020, suggesting jewelers are in much better shape now compared to the last downturn. Still, if you haven’t aggressively gathered your floor sweeps yet, you probably should. In these times of uncertainty, you don’t want to be leaving cash under the carpet.

For all the results of the 2020 Big Survey, keep an eye out for the November issue of INSTORE. It should be landing on your doorstep around the end of October.

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Over the years, INSTORE has won 80 international journalism awards for its publication and website. Contact INSTORE's editors at [email protected].

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If It’s Time to Consolidate, It’s Time to Call Wilkerson

When Tom Moses decided to close one of the two Moses Jewelers stores in western Pennsylvania, it was time to call in the experts. After reviewing two candidates, Moses, a co-owner of the 72 year-old business, decided to go with Wilkerson. The sale went better than expected. Concerned about running it during the pandemic, Moses says it might have helped the sale. “People wanted to get out, so there was pent-up demand,” he says. “Folks were not traveling so there was disposable income, and we don’t recall a single client commenting to us, feeling uncomfortable. It was busy in here!” And perhaps most importantly, Wilkerson was easy to deal with, he says, and Susan, their personal Wilkerson consultant, was knowledgeable, organized and “really good.” Now, the company can focus on their remaining location — without the hassle of carrying over merchandise that either wouldn’t fit or hadn’t sold. “The decision to hire Wilkerson was a good one,” says Moses.

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