Gold is down nearly 8 per cent this morning.
Some say it’s a conspiracy.
But those who actually deal in day-to-day buying and selling of physical gold products aren’t convinced the rout will last.
We spoke with both retailers and manufacturers.
They said there’s been too much fluctuation in recent years to call any trend on such a short-term price change.
“It’s gone up and down quite a bit over the last two years, so I’m not optimistic that it’s going to stay down,” John Comerford, owner of Robbinsville, N.J.-based Basil Ltd. which retails Irish and Celtic-inspired jewellery, told us.
David Hopkinson, a manufacturer also out of New Jersey, said he believes there’s too much speculation in the gold market to say where prices will head.
“No one truly knows what drives it,” he said.
He compared the gold market to oil. “Fuel, you only pass paper, then turn it around. You’re moving paper. If people actually had to take possession of what they’re trading, it might change things, wouldn’t be such speculative price.”
Some manufacturers are diving in to take advantage of the drop. Ibrahim Fadl, a wholesale merchant (and the guy who discovered Tungsten-filled gold bars were circulating on Manhattan’s Jeweler’s Row), said he’s already taken an order to buy one kilogram of gold.
Producers are telling him they were blindsided by the move.
Basil’s Comerford believes there’s been too much central bank asset purchasing to keep gold down for long.
“I’m worried about the U.S. dollar. If it continues to fall in value, the only thing that will retain its value is gold, which would drive that back up.”
Meanwhile, consumers shouldn’t expect to see lower prices filter through to retail any time soon, Comerford said.
“Our prices from our vendors wouldn’t change day to day, week to week,” he said. “It might alter prices over a six or 12 month period, but we’re not going to be able to step in because gold went down.”