Silver Prices Are Going UP . . .
Posted: Jul 14 2016
July, 2016 Elkhart, IN, We have enjoyed several years of fairly consistent silver prices, but it’s time to start paying attention.
When I started this business in 2006, silver was selling for $14.90 a troy ounce. I remember people bemoaning the outrageous prices on that trip, but I was new to the industry so didn’t have the “glory days” to compare my purchases to. The prices hedged up slowly, but consistently, from that first trip until it peaked at almost $50! (I remember that day very well!!) A lot of people dropped out of the business in 2011– and it had a horrible impact on the artisan craft in Taxco. Thankfully, silver started its trek back down the cycle, slowly, and hit its lowest point, late in 2015, at $13.71. Prices really began escalating in April of 2016, and crested the $20 mark last week. That’s a 50% gain since January 1. Silver has reached a price level we haven’t seen since August of 2014.
Who’s to blame? Well – to the East, the Chinese have staked a considerable claim in Silver. Across the pond, a lot of people are pointing to Brexit and using terms like Easing Money Policies in the Bank of England (whatever that means). Right here at home, it’s election year, and the Feds are hinting at Rate Hikes. One thing you can take to the bank, when the stock market is volatile, people run to Commodities.
Simply stated: When people are unsettled, they run to the relative haven of commodities.
What does that mean for you and me? I’m not sure, yet.
We buy jewelry at that day’s silver price, plus a premium based on the skill level of the worker. So yes, we are paying more for jewelry that is coming in today than the orders we paced a couple of months ago. But, we pay with Mexican Pesos, and the strength of the US Dollar is helping soften the increase. (Sometimes working with two fluctuating markets has its advantages.)
We sell our jewelry by the piece, and set the suggested retail price based on the average landed cost of that piece. Why? Well, for one thing, we’re lazy. Who wants to keep retagging?! But taking a long-term view allows us to offer a consistent price to our customers rather than holding them captive to the daily fluctuation of the market. Over the past 10 years, our policy has absorbed a lot of ups and downs, and given us all some much needed consistency.
Get out your crystal ball. We will be watching, and reporting back as the market continues through this cycle.
(Thank you Kitco.com)