On Valentine's Day, Andrew Davis likes to buy his wife, Kellie, nice jewelry. But the Iraq war veteran is having to think twice about a major purchase this year.
"I do not have a good job and we are living with my parents," he said recently while shopping at Bennion Jewelers in Salt Lake City. "Getting an 'I love you' gift is difficult. It's too expensive."
The problem is the price of gold, which has spiked significantly in recent months. Six years ago the precious metal was $400 an ounce. Today it's around $1,062 an ounce.
Silver has more than doubled, too, according to the American Society of Appraisers (ASA), headquartered in Washington, D.C.
These higher prices will likely cause some gift-buying dilemmas this Feb. 14. Even at discount stores, like Walmart, consumers are in for some sticker shock.
Metals prices are only one part of the cost of jewelry. Fortunately, gemstones and labor have not risen as quickly, according to the ASA.
Some Utah businesses, such as Gines Fine Jewelers in West Jordan, have lowered their profit margin to bring in customers.
"I am trying to keep the price down," said the owner Ray Gines. "Jewelry is not an item you need like food and gas. But people still get married."
When gold was $400 an ounce, Gines said he charged between $42 to $48 a gram for custom-made pieces. Now, even though gold has tripled, he only charges $68 a gram.
Other jewelers, such as Bennion, are surviving the crunch because they bought much of their current inventory before the price of gold spiked about nine months ago.
"We tell people to buy what we have in stock," said Riki Eastmond a Bennion buyer, who "dreads" when she has to go back into the marketplace to replace the existing inventory.
Eastmond said despite the high price of popular white gold items, there are some bargains for couples willing to make a few compromises. Yellow gold that has been in stock for several years is "dirt cheap," she said. Silver charm bracelets and earrings also are more affordable. Beads and even pearls are a good alternative as well.
Platinum is still a good value, but is rising now that auto manufacturers are back in production, using the metal in catalytic converters.
When shopping for a men's wedding band, couples should consider something made of tungsten or titanium, said Gines. It is more affordable and a better choice than silver, which can tarnish.
Pieces that are gold-plated or made of sterling silver are also more affordable, added Bob McKay, owner of McKay Jewelers.
But McKay said that even high prices and a recession aren't enough to stop someone in love.
"Where romance is concerned," he said, "price doesn't matter."
The American Society of Appraisers recommends that consumers do some research on the price of precious metals before going to the jewelry store.
Consumers can track the price of gold, silver, platinum, on Web sites such as Kitco.com.
As an added protection, have the jeweler write a description of the piece on the receipt and put the return policy in writing.
If a deal seems too good to be true, it probably is. When buying from the Internet, eBay or Craigslist, find a seller who will let you have the item verified by an independent appraiser before you purchase the item. If they won't, don't buy it.
If the gift is a higher value piece of jewelry, ASA offers these suggestions:
Don't buy an expensive diamond or colored gemstone that doesn't have a report from a major lab. Look for reports from the Gemological Institute of America (GIA), the American Gem Society (AGS) or the American Gem Trade Association lab (GTC).
Be cautious when buying rubies. Some "rubies" are composites of low-grade ruby material and colored glass. They are attractive, but more in the nature of costume jewelry. Always ask the salesperson to write down what treatments have been applied to colored stones.
Have the jewelry independently appraised for insurance purposes as well as to have a record of the value of the piece.
Choose an appraiser who is an accredited member of a nationally recognized appraisal organization, such as the American Society of Appraisers, as well as a Graduate Gemologist of the Gemological Institute of America (GIA) or the Gemmological Association of Great Britain (FGA).
Ask about an appraiser's credentials and make sure they are still active.
Make sure the appraisal is done for a set fee, not for a percentage of the value -- that's unethical.
For more information about appraisals, or to find an accredited appraiser visit www.appraisers.org or call 800-272-8258.
Source » The American Society of Appraisers
