Gold marches higher as Trump’s tariff threat boosts demand
Gold prices rose to a record high on Wednesday as investors poured into the safe-haven asset following President Trump’s latest tariff threats. It was the ninth time this year that the precious metal hit a new peak.
- Gold hit an all-time high of $3,500 an ounce in April.
- Father’s Day jewelry this year could cost even more.
- Investors are asking: Is gold still a good buy?
Jewelers at the Miner’s Den filed and polished gold as they fashioned rings and other pieces, sending the tiny, sparkly flakes flying and landing into a drawer below that was set up to catch them.
Tom Schowalter — who owns the Royal Oak store with his older brother, Mike — weighed filings that had been scooped into a small, plastic container. Then, he punched calculator numbers to figure out the collected gold dust’s worth.
“That’s about $25,000,” Tom Schowalter said.
How much? He mentally checked his math and then repeated: “$25,000.”
With the price of gold soaring, jewelers are saving every speck of the precious metal, even the particles so fine they are like powder. The price of gold hit an all-time high of $3,500 an ounce in April.
The Miner’s Den is even saving vacuum bags to retrieve sucked up gold dust.
So, if for Father’s Day you’re thinking about getting your old man an extra special gift — a chunky gold ring, a gangster gold chain or a solid gold watch — know that it could really cost you.
The high price of gold has been driven by inflation, worries about investing in the stock market — even the bond market, which often is considered safer — and purchases of the precious metal by other countries, particularly China, in response to trade instability.
Buying and selling gold
Gold prices have come down somewhat since April.
But they are still sky-high, trading midday Monday at $3,350 an ounce.
For many jewelers, that means they will pass some of the additional costs onto customers, although some jewelry makers like the Miner’s Den are willing to reduce their profit margins to keep their best customers coming back.
And for those with gold they are ready to part with, perhaps that 14K bracelet they haven’t worn in years or the heirloom gold pocket watch that no longer works, it means that this could be a good time to cash in.
Investors are asking their financial advisers — if they have one — if gold is a good buy.
The answer: If you are looking for a safe place to put your money, gold, a commodity, can diversify risk. It is subject to speculation, but unlike currency or stock shares, it isn’t something that a government or company can decide just to issue.
A year ago, gold was trading at about $2,325 an ounce, and it is now up more than 40%. Five years ago, gold was trading at about $1,600 an ounce. And a decade ago, it was only about $1,185 an ounce. That’s about a 180% increase.
Class rings cost more
The surge in the gold price has been so sudden that some jewelers, including class ring companies like Jostens, have been caught somewhat off-guard. Jostens quoted one price estimate for rings and then, as the gold price rose, it had to revise the estimates up.
The increase gave some parents helping their future graduates — high school and college — heart palpitations. The estimates, especially for the men’s rings, were suddenly substantially more than they expected.
At the U.S. Military Academy, which started the class ring tradition, it caused such a stir that the ring company let cadets change their orders. West Point is so associated with class rings that its graduates are known as “ring knockers.”
Raffaele Berlingieri, whose son, Michael, is a West Point cadet, said that when his son got the bill for his ring, it was for much more than what he was quoted. But Berlingieri, who lives in Washington Township, said he heard other orders were even more shocking.
Still, Berlingieri said, the gold price increase hasn’t been bad for everyone.
A few years ago, he said, a buddy decided to take his money out of the stock market and invest it in the precious metal. At the time, some of his friends thought it was a rash move, but it turned out to be a profitable investment.
Gold in the carpet
Jewelry stores have long been careful about gold filings.
“We’ve always done this,” Tom Schowalter, 62, said. “It’s not just because gold is high.”
When the family-owned business opened in 1971, it was just a small space that Mike Schowalter, now 76, and his dad, Frank, operated to sell rocks they had collected as a hobby and no longer had room in their garage to store.
Gradually, the shop has grown into a $10-million business.
They expanded the store, adding jewelry and more family members to help run it. Frank’s wife, Barbara, got involved, and so did Tom, as he got older. Later, the two brothers’ sons — Michael, 27, and Matt, 30 — joined the venture.
They have, their fathers said, all sorts of ideas for the shop.
There’s also a bit of family mining lore that adds to the store’s history — and name.
Will Walker, who Frank Schowalter called “Uncle Will,” staked a mining claim during the second great California Gold Rush in the early 1900s and supposedly struck it rich, but lost his money in the Great Depression.
Frank tried mining in Alaska, but came home to Michigan to borrow money from his dad, also named Frank, to buy a bulldozer. He didn’t get the ‘dozer, but ended up with a wife, a family, and eventually a rock shop.
The Schowalter brothers said the store’s lost gold filings helped cover the cost of some updates a few years ago. They replaced the old carpet, carefully removing it and then sending it out to a place to recover any gold that might have gotten caught in the fibers.
There was enough gold in it, they said, to pay for the new flooring — and then some.
They can only imagine how much money may be hiding in the store’s carpets now.
A good time to buy?
Whether gold prices will come down any more depends on whether the economy — roiled by uncertainty about international trade and questions about the national deficit — will settle down.
The Schowalter brothers predicted in mid-May that the price likely would come down some, which would be good news for them and their customers, the ones seeking to buy gold jewelry — not sell it — that is.
And sure enough, the gold prices did come down, which led the Economic Times — an English-language, daily business publication sold in India — to speculate that “gold’s safe-haven appeal” was fading.
The Economic Times’ headline: “Gold price today in the U.S. dips sharply — Is this an economic earthquake, which Trump tariff ruling triggered it, and what should investors watch out for next?”
The report suggested that gold’s price drop, along with other shifting economic conditions in the American economy, could indicate some “short-term weakness” in the price of gold.
But the article also said the dip “could be a buying opportunity for long-term holders.”
Gold, the Indian newspaper added, has long-term value to “those betting on inflation risks, global conflict or dollar volatility,” and suggested this still could be “a smart time” to purchase the precious metal.
Of course, if you are interested, the Schowalter brothers know just the place you can go.
Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com.