New High for Gold Prices

The precious metal reached an all-time high on Friday of $1,637.50 an ounce.

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Prices of precious metals continue to rise, but it’s gold — which reached an all-time high on Friday of $1,637.50 an ounce — that has seen the sharpest increase.

This story first appeared in the August 1, 2011 issue of WWD.  Subscribe Today.

Industry experts predict that if gold continues on its upper trajectory, prices will reach $2,000 an ounce by year’s end.

Despite this, brick-and-mortar players such as Richemont, Tiffany & Co., Bulgari and Signet haven’t seen much resistance from customers — and because inventory turns are just one time a year, the above are still going through gold purchased at last year’s prices, according to David Wu, luxury goods and beauty research analyst at Telsey Advisory Group.

“[In 2010] the prices didn’t increase in as great of a magnitude [as this year], so they are not as pressured, but they will start to see better pressure from the rise in gold and silver next year. So far they have passed along price increases to the consumer in the first half of the year and they have been accepted by the customers,” Wu said.

Silver reached its highest price of the month on July 26 at $40.98 an ounce, but this is still down 18 percent since the record high of $49.53 on April 28 (prices exactly a year ago were just $18.58). Analysts expect the price to head toward $60 by the end of 2011.

The price of platinum was down to $1,795 an ounce on Friday from $1,889 on May 2 — but that was still up 24.6 percent since August 23, 2010 when the price dipped to $1,516.

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