Archive for May 13th, 2011
You hear it all the time: “Gold and silver are at an all-time high!”
Some important questions arise from this fact that we would like to address:
Why are gold and silver prices so high? What is the forecast for metal prices?What impact will this price increase have on jewelry?
Word on the street is that the main reason for gold and silver prices increases has nothing to do with inflation, currency, or the economy’s status quo. In reality, predatory billionaires with schools of brokers, traders, and speculators surrounding them are driving commodity prices up for their own selfish gain.
This is not sustainable given our current economic climate. We believe that prices would significantly decrease if they were disconnected from those traders. Unfortunately, we live in the real world. Such a situation is impossible. Given the insatiable appetite of rapacious billionaires who are willing to suck all of the blood out of the proletariat (along with their money), we continue to see prices creeping up slowly. Unless there’s a catastrophe, no sudden price jump is forecasted.
You might have noticed that thus far we’re only addressed gold and silver. What about platinum?
Platinum will in all likelihood increase in price within a year or two to unprecedented levels. The rule of thumb is that when price of platinum falls to under 10% more than the price of gold, it becomes strongly undervalued. Currently, it is only about 15% more than gold.A realistic platinum price would be about 80% more than gold.
Today, platinum prices are unbelievably low. So why exactly are platinum prices so low?
1) Due to platinum’s rarity the sheer volume of platinum doesn’t allow vicious traders to put massive bets on the metal.
2) With the auto industry in the latrine (where most platinum is consumed –unlike popular belief that it’s used mainly in jewelry), platinum prices are artificially depressed.
Therefore, we advise a “strong buy” for this metal.
Effect current metal prices will have on jewelry:
When prices adjust accordingly with real world supply/demand value, people will be stunned to realize how “inexpensive” gold jewelry really is compared to platinum. People will see a flood of poorly made, low cost, imported gold jewelry on the market which will push the trend for jewelry that has few diamonds or gemstones. Given this, we forecast a shift to a growing popularity of flowery styles, and bold geometric shapes designs. Stone Jewelry (high-end jewelry with diamonds/gems and very little metal) will once again be relegated to the higher and finer spectrum of the market.
Wearing platinum engagement rings will be a luxury reserved for a few lucky people –just as it was 20 years ago.
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