Jewelry sales strong amid surging silver prices
National Jeweler, NY
By Glenn Law
APRIL 25, 2006 – New York — World silver prices rose sharply in the first quarter of 2006, up 39.5 percent over the same period last year to average $9.78 an ounce for the first quarter.
That was the backdrop for the presentation of Silver Survey 2005 by metals analysts CPM Group in Manhattan this morning.
The swift rise in silver reflects the continuing robust growth of all metals on the world market, and the enthusiasm for silver investments by ETFs (exchange traded funds) including institutional investors and hedge funds.
This is a particular characteristic of the world silver market, explained Jeffrey M. Christian, managing director of CPM—price seldom affects demand, unlike the market for other metals, where demand is closely linked to price.
Despite the rising prices of the metal, demand for silver for fabricated products, including jewelry, remained relatively flat over 2005. However, CPM reports in its Silver Survey that the metal’s price has clearly had a major effect on the worldwide use of silver in jewelry and silverware.
In India, an extreme increase in demand for silver used in electroplating eclipsed the demand for solid-silver jewelry fabrication, which fell drastically in 2005. Demand for silver for electroplating in India grew sixfold to 48.2 million ounces last year, up from 8 million ounces in 2004.
In the United States, silver demand for jewelry, silverware and plating held on, rising slightly from 14.1 million ounces in 2004 to 14.4 million ounces in 2005. However, CPM projects that U.S. demand for silver will drop to 13.6 million ounces in 2006, in response to the metal’s rising prices .
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Retail jewelers contacted by NATIONAL JEWELER reported little effect of rising silver prices on their jewelry sales.
“We sell designer product in silver and it has been popular, but it hasn’t been driven by price,” says Bill Pearlman, owner of Pearlman’s in Battle Creek, Mich. “The desire to have the designer look is pushing that market.”
Silver jewelry appears to be gaining slightly in sales, perhaps because its lower price compared to gold makes the purchase of larger pieces more attractive.
“People are buying more silver,” says Susan Robinson, of Susan Robinson Jewelry in Tyler, Texas. “The price is not having any effect on business in [David] Yurman or [John] Hardy, and we recently brought in Jane Francis.
