Gold is just part of the cost of most jewelry. One shop owner says gold’s high price is

Gold is just part of the cost of most jewelry. One shop owner says gold’s high price is because of high oil costs.

By SEAN BARRON

VINDICATOR CORRESPONDENT

Despite the rapidly rising price of gold, area residents are still buying jewelry and investment coins.

Bruce Miller, owner of Canfield Coins & Collectibles, said he is selling more solid gold than he was five years ago, even though the price of gold has risen from $320 an ounce to about $800.

“Some customers aren’t interested in coin collecting but in an investment. Most people are jumping in thinking it will continue to run,” he said.

Miller’s store at 4354 Boardman-Canfield Road counts as its stock many Canadian Maple Leaf, American Eagle and South African Krugerrand gold coins.

Miller also sells numismatic gold items, which are more valuable as coins than for their gold content.

The high price of the commodity has required more money for Miller to run his business, though much of that cost is often more than offset by his selling more gold and faster, he said.

He added, however, that some area residents are buying gold in Pennsylvania because investment coins are exempt from that state’s sales tax. For the same reason, he conducts many coin shows in Pennsylvania.

Miller sees a weaker U.S. dollar and rising oil prices as main contributors to the high price of gold.

Concurring was Tom Bartholomew, owner of Tele-Gold Jewelers at 8051 Market St., Boardman. Bartholomew, who’s been a coin dealer since the early 1970s, also cited lower prime interest rates and the 2008 presidential election as possible factors.

“The election has a lot to do with the stability of our country, and certain policies make [some] people nervous, so they run to a hard asset they know will be there,” he said.

Despite the higher costs, sales of rope chains and some pendant jewelry has increased over the past few years, he said. A lot of people are buying gold because they fear the dollar will continue to weaken, he added.

Bartholomew predicted that gold’s price will peak at around $875 an ounce next year, but that it will level off afterward.

In several ways, higher gold prices have been good for Ace Diamond & Jewelry Brokers, 7110 Market St., Boardman. More people are selling scrap gold and buying larger items such as engagement rings and pendants, said Jim Eckman, company president. The business sells large and unusual diamond pieces as well as pre-owned jewelry.

Higher gold prices have caused some people to focus more on larger items, such as those that the store sells.

“It’s just been a good ride for us,” Eckman said.

Tim Smith, owner of Smith & Co. Jewelers in Boardman, said the increase in gold prices hasn’t hurt his business.

“I haven’t heard any consumers express concern or pass on a project because of gold prices,” he said.

Gold prices are just part of the cost of jewelry, unless it is a gold chain or simple wedding band, he said. Other costs include gem stones and labor.

Smith said a $1,000 piece of jewelry may have $250 worth of gold in it. If gold prices go up 20 percent, that adds only $50 to the total cost and the retailer and manufacturer may absorb some of the increase, he said.