Summary
Current changes in gold price may hit retailers badly, in many ways.
Analysis
Current Fluectuations in gold prices will hit badly to all retailers. Duw to which thier margins will fall and it might be possible that big brands like Tiffany, Zale, Signet and other brands can face gold shortage in market.
Many brands will also face problem in thier promotional strategies and in they have to reprice thier ticketing tags of product.
Gold experienced robust demand this week as the metal touched a 10 month low ($774.90oz.) at one point. Kitco.com had to run a special notice for users stating that due to increased demand for bullion and they may experience delays in supply and possibly delays in processing and shipping by our vaults.
The U.S. Mint had to temporarily suspend sales of 1oz. 2008 American Eagle coins since its vendors were not able to supply enough gold bullion blanks to meet the unprecedented demand.
One-half ounce, one-quarter ounce, and one-tenth ounce 22-karat American Eagle Gold Bullion coins were still available. On the week gold is up 4.6 percent to $823.30oz. as of mid-day. Platinum is up 3 percent to $1,409oz. and silver is up 1.7 percent to $13.39oz. The dollar lost 1.3 percent on the week to 76.1 mainly due to slightly negative economic news (although no surprises) from the United States. With gold considered to be at a bargain by some the metal proved again to be a hedge against ongoing uncertainty.
And due to this reason if brands miss this oppurtunity of placing orders and did not able to manage to get it done then it will hit them badly on thier costing.
Brands are in planning for thier promotional strategies and they have to get ready with that soon in which they promote and mention the full details of value and price of the product and during this time due to tag repricing this may lead to fall in thier margins in 4th quater of 2008.
This is a major issue for all the retailers and they have to tackle it by thier own because if they fail then it may reflect in very bad way financialy and market share.
