Monday, April 17, 2006

Speculating in Bling: Gold and Silver

Gold and silver prices are amazing. I speculated in a few pieces last spring: 18k white gold sapphire ring bought at auction for $38 (informally appraised at over $800), gold chains ranging in the gram weight from 5-16 when gold was half the going price. Most of the pieces have been given as gifts, but the ring and a 16-gram 14k chain I'm still holding. I started wondering if it was time to consider cashing in.

Daniel Gross over at Slate.Com provides an overview of the rising prices of gold:

In other words, the eternal and largely immobile store of value is soaring, thanks to some newfangled trends in investment. Gold used to be incredibly valuable because it couldn't easily be destroyed and it was difficult to move vast quantities of it. Today, it's incredibly valuable—at least in the short term—because some of the fastest-moving cash in the world has decided that gold is the place to be, at least for now. When that cash decides gold isn't the place to be, the price may plunge faster than it rose.

Daniel Engber weighs in on my wondering whether it was time to sell the family silver or the jewelry pieces:
Casual consumers expect to pay a certain amount for a piece of jewelry. If the gold market forced jewelry prices higher, they'd stop buying. gas station owners aren't selling a luxury product that customers expect to buy at a certain price.

I think I'll keep holding for now.

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