GOLD GLITTERS AGAIN!
It's time to take a serious look at the gold
market and its relationship to gold pocket watch values. As you can
see by the graph below, gold started its run way back in 1999 when it
was trading for a mere $252.00 per ounce on July 20th. A slow but
steady climb began and gold reached a respectable $525.00 per ounce at
the start of 2006. Then it happened! An accelerated run up began and
gold reach $725.00 an ounce on May 12, 2006 - remarkable? No, not
really, lets just say "long overdue." The run up of the market was
impressive but believe me the gold dust has not settled yet!
Gold has always been a
favorite of investors seeking hard assets and those concerned about
long term capital preservation, asset diversification and as a hedge
against inflation. Now, however, there are many new factors changing
the economic playing field - factors which are affecting not only the
gold market but the watch and jewelry markets as well.
We could analyze the factors for weeks but
in brief, just consider the following:
- Iran and its future intentions, ditto North Korea, surging oil
prices. The ugly threat of terrorism.
A growing loss of
confidence in the paper dollar and great concerns about the strength
of the American dollar and economy in general.
An ever growing demand for
hard assets (i.e. gold, fine watches and jewels) by consumers in
China, India, Russia as well as other emerging countries which are
under going modernization. Fact - Southeast Asia represents 3
billion people - this is approximately half of the entire worlds
Supply and demand never
changes - mining gold is very expensive with production costs
between $200.00 - $300.00 per ounce. There is also the problem of
finding gold in large enough concentrations to make it cost
effective to mine. Panning for gold may have worked when our antique
pocket watches were made but not now.
Where is gold going? The
general consensus is that gold will stay around $630.00 per ounce by
the end of 2006 and average around $730.00 per ounce in 2007. More
speculative thinkers predict that a world financial crisis or major
geopolitical troubles could cause gold to spike to about $850.00 per
ounce and even as high as $1,200.00 - $1,600.00 per ounce.
How does this relate to
gold pocket watches, wrist watches and jewelry?
The value of antique pocket
watches, collectors wrist watches and estate jewelry are not based
entirely on a "scrap" or melt value. They have an intrinsic value as
well. Simply stated - they will never be produced again. This double
value (bullion paired with collectibility) simply adds to the appeal
and desirability of watches and jewelry. This duality of value also
puts you - the collector in a very advantageous position providing you
look towards the future and sense the trend before its to late.
Something took place on May
12, 2006 which gave us at Ashland and most likely many other dealers
around the world a "bit of a scare." Gold spot hit $730.00 per ounce
and now we had literally hundreds of items posted for sale at less
than melt! Gold pocket watches, ladies Retro wrist watches with gold
bands, bracelets, necklaces, gold watch chains and more - all up for
sale but worth more for their gold weight!
Here's a prime example. Lets
look at the gold value of a medium heavy Waltham or Elgin, 14K, 6 size
ladies gold hunters case. These typically weigh about 20 dwts (one
ounce) with the movement, crystal and case springs stripped out.
Ashland has been selling watches like this complete, running and near
mint for $300.00 each - wonderful antiques from 1880 - 1910! The chart
below shows the melt value of these watches.
|| Price per dwt.
|| x 20 dwts.(weight of
|| melt value
Wow? One hundred gold
6 size hunters bought from Ashland at $300.00 per ($30,000.00) were
now worth in melt value $400.00 per ($40,000.00) on May 12, 2006 with
gold at $730.00 per ounce - a $10,000.00 increase in merely a years
There are many opportunities
like this in the watch and jewelry market place. Keep this in mind. If
you think a price is high today - wait until tomorrow it will be even
higher, also remember the 3 billion admirers of fine things in
Southeast Asia. The high end market for rare watches is already
adjusting itself to this new world market - if the item is desirable,
it will sell and sell very high. A record price is set the moment it
is sold but the record generally only lasts until the same item is
offered again and another record is set.
Thanks for reading -
please enjoy our special gold sale - every watch offers terrific value
inside and out, for today and for the future.