Gold prices have hit all-time record highs, rising roughly 45% compared to last year and increasing by over 100% in the past five years.
This surge is also driving up the cost of gold jewellery, including pre-owned pieces.
“People have started to realise that there is a return, so we are finding that more people are going through their items at home and seeing what little treasures they might have, and then they can bring it to us for a no-cost appraisal,” said Christine Power, head of fine jewels, watches and luxury accessories at auction house Webb’s.
She explained that there are a few different methods for conducting the appraisal.
“We are obviously looking at the finished weight of the item, and then we’re looking at that against the current gold price.”
“We can either look at the price per gram of an item or the gold per ounce, and then we’ve noticed, year-on-year, in the last four years the gold price has moved up about 40%.”
“So it has definitely changed the price of how we would have priced something four years ago to how we price it today.”
Power noted that plain gold items, like fob chains and bangles, experienced a boost due to the rise in gold prices.
A Tiffany bangle made of 18-carat yellow gold recently sold for $12,500, including the buyer’s premium, exceeding Webb’s initial estimate. She mentioned that there was strong demand for luxury brands.
“We can present it to the market really easily. It’s just a quick way of getting a return on your asset.”
“It does have to be of a certain standard … When we do our appraisals, we’re looking at the finished pure gold price; as opposed to if something was quite worn, then we would prorate that in accordance.”
“We wouldn’t necessarily be pricing that based off a fine gold price,” Power added.
CMC Markets general manager, Chris Smith, said that the future value of gold would depend on the broader economic conditions.
“Gold’s recently hit another new all-time high at US$3450 on the back of dovish data that’s coming out of the US, which is setting them up for that September rate cut that marketers will be closely watching, which benefits gold.”
The price surpassed US$3,500 overnight.
“We’ve got the Fed decision on the 17th of September, so I think the market will be looking at the jobs report this week on Friday, which will be the key next data event to signal the September cut, if it’s going to be priced in.”
Smith said that as long as the Fed shifts to cutting rates, he doesn’t see any reason for gold to experience a sharp decline.
“I think central bank demand continues to be very strong. Silver’s actually getting a lot of attention at the moment; silver was up almost 7% in August. It’s up again 38% in the last year, in line with gold.”
“So because silver’s a bit cheaper, we’re seeing a lot of interest in the markets really, in terms of silver as a catch-up play. Gold’s obviously had a few years of very strong performance. But yeah, it all lies on the Fed meeting.”