Gold’s got a little too much glitter
TEXT OF STORY
KAI RYSSDAL: The other market story today, away from stocks and bonds, was commodities. It’s been a wild ride on that side of the house. Corn and wheat prices have been hitting records. Sugar’s higher. Coffee and cocoa hit multi-year highs today. And gold topped $900 an ounce at one point this morning — $900.10 to be exact. Closed just a hair shy of it. We know it’s not like you’re going to go out and buy an ingot or anything anytime soon. But consumers and certain retailers will be feeling the pain. Marketplace’s Janet Babin reports from North Carolina Public Radio:
JANET BABIN: The price of gold’s been going up for the past several years. But till now, that hasn’t been a problem for jewelry store owner William Travis Kukovich:
William Travis Kukovich: I’m 37. My entire career in the jewelry industry has been a boom.
Then came Holiday 2007. Kukovich says sales were lower than expected. He blames the weak dollar and rising gold prices.
Kukovich: It makes a $300-$400 pair of earings, which is expensive … all of a sudden are a $600 pair of earings. So we do lose sales because of the price of gold.
And the more consumers feel squeezed by the faltering economy, the higher gold prices could go.
James Turk is with Goldmoney.com:
James Turk: Gold goes up because it’s a barometer of inflationary pressures, and we’re really seeing this today. You know, crude oil is in the 90s, wheat is above $10 a bushel, corn is now over $4 a bushel and rising.
Theoretically, you can’t go to your local grocery store and buy that more expensive loaf of bread with gold bullion. But some financial experts see gold as a tangible asset, a safe haven in times of turmoil. And many experts think there’s a lot more turmoil to go around, especially from the global credit crisis.
John Thorpe is with Cannon Futures Trading:
John Thorpe: This market could go a lot higher than it currently is, and $900 is probably a stopping point on the way to the top of this mountain.
If that’s the case, it could mean lots of repricing, and shrinking sales, for jewelers like William Travis Kukovich.
In Chapel Hill, N.C., I’m Janet Babin for Marketplace.
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