Consumers to Spend 6.4 Billion of Jewelry This Valentine’s Day February 15, 2024 – Posted in: Press – Tags: , , , , , ,

Dear Valued Clients,
The House of Kahn Estate Jewelers is proud to be featured in Neils Christensen’s report from Kitco News! Kitco News is one of the largest newsources that provides data and market insights on precious metals. Please enjoy this article with excellent reporting on estate jewels as investments:

Consumers to spend $6.4 billion on jewelry this Valentine’s Day, but avoid the sticker shock and buy in the secondary market

By: Neils Christensen
Published on: February 13th, 2024

Pictured Above: 14 karat Yellow Gold purse, containing 10.5 oz of gold, now at House of Kahn Estate Jewelers

(Kitco News) – Love is in the air, and that is helping to drive physical gold demand as North American consumers are expected to spend a record $6.4 billion on jewelry for Valentine’s Day, according to research from the National Retail Federation.

According to its annual survey, U.S. consumers are expected to spend a record amount on Jewelry, representing the net bulk of gift purchases ahead of Feb. 14. In total, consumers are expected to spend about $25.8 billion, roughly unchanged from 2023 spending trends.

According to the survey, the top gift for Valentine’s Day is candy, followed by greeting cards, flowers, spending on an evening out and jewelry, rounding out the top five gifts this year.

“While shoppers may be spending the most on jewelry, overall, the most popular gifts are the classics – candy and greeting cards,” Prosper Insights & Analytics Executive Vice President of Strategy Phil Rist said in the report.

Spending on candy ahead of Valentine’s Day comes as cocoa prices have seen a parabolic rise, jumping over 100% in the last year. So far this year, cocoa prices are up 27%.

Ole Hansen, head of commodity strategy at Saxo Bank, said in a video comment on YouTube that the world’s two largest cocoa producers, Ghana and West Africa, have seen a significant drop in cocoa bean production this year.

Hansen said that hot weather and rising costs of pesticides and fertilizers have impacted the harvest in the past year. He noted that cocoa exports from West Africa are down 40% compared to the previous year.

While cocoa prices are skyrocketing, Hansen said consumers might not feel the effects this year.

“It often takes six to 12 months for these price rises to filter through to the end product, but what we will notice in the coming months is rising prices for chocolate bars and perhaps even what we call shrinkflation size of your chocolate goes down,” he said.

Meanwhile, the rising threat of inflation means that gold jewelry could be an even more precious gift this year, according to Tobina Kahn, President of the House of Kahn Estate Jewelers.

“I still recommend consumers need to own more gold; its trajectory is still going up, but you have to buy it the right way,” she said.

Kahn noted that the problem with buying gold jewelry as an investment is that consumers going to a high-end store will end up paying an exorbitant premium on the precious metal.

“They are paying for a designer name, but that won’t reflect the actual value of the jewelry,” she said. “If you buy your jewelry from a mass chain, it’s not going to be an investment. It’s going to be something pretty and will come in a nice box, but it’s not an investment.”

Kahn said a better option for consumers is buying jewelry on the secondary market through estate houses. She noted that the markup in the secondary market is much less because consumers aren’t paying designer costs.

At the same time, Kahn said that estate jewelry has a uniqueness that shouldn’t be underestimated.

“If you buy jewelry that was made in the 1960s, it wasn’t mass produced. The chances are the craftmanship is going to be better. It’s going to have more gold value; they are going to be heavier pieces,” she said.

Although gold prices continue to hold support above $2,000 an ounce, Kahn said that now is a good time to invest in jewelry as there is a robust market of buyers and sellers. She added that many consumers are selling their jewelry to take advantage of higher prices, giving buyers more choice.

“Inflation isn’t going away, so now is a good time to buy gold and protect your wealth,” said Kahn.