Gold prices are breaking one historical record after another. And analysts believe there is considerable scope for further rises. With the bulls charging, market conditions are creating new conditions in the precious metal. Not only as a commodity, but also in wholesale and retail.
Greece has a long tradition of silversmithing. And understandably, the explosive price increases are reshaping the landscape, bringing the industry face to face with significant challenges.
The Economic Tachidromos spoke with the president of the Athens Association of Silver and Goldsmiths, Mr. George Spyromilios, founder of IGLcert and a qualified gemologist - diamondologist and appraiser.
«Gold is probably the top investment choice for centuries as it is a safe and timeless asset,» he explains. Making particular reference to the recent trend regarding the pound: «In terms of gold pounds, there seems to be a trend at the moment of selling by individuals to the Bank of Greece due to the rising gold price.
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Mr Spyromilios stresses that the industry is facing a multitude of problems.
In addition to the rising price of gold, which is the raw material in the manufacture of jewellery, the industry has to deal with the over-taxation of the product by the state.
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«Another problem is the lack of housing in the city centre. The advent of short-term rentals is in turn affecting our industry. Creating barriers to the creation, housing and operation of goldsmith workshops. But also interrupting a long-standing tradition that dates back to antiquity, that of jewellery making in the centre of Athens,» he explains.
The president of the Athens silversmiths stresses that the Greek jewellery industry has a 6000 year old history. «One can say that Greeks have jewellery in our DNA. Something that I believe is reflected by our archaeological treasures and also by the jewellery that has been passed down from generation to generation for hundreds of years» he stresses.
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Mr Spyromilios makes special reference to the lack of new artificial ones and calls on the state to provide incentives to support the industry. «Jewellery is an integral part of our culture and arts. And that is why we must train the next generation of jewellers through public and private schools. But also through the School of Fine Arts to ensure the continuation of an important and long tradition, he says. The state must become a facilitator of the efforts of young people as they enter the jewellery industry. Incentivise them to follow the jewellery profession so as to safeguard the future of the industry.».
The picture on the market
Asked about how the market has been affected, Mr Spyromilios recalls that since 2010 a luxury tax 10% has been imposed on jewellery whose value exceeds €1000 before VAT. A tax that still exists today.
«It may be noted here that the price of gold has more than doubled, but the 10% tax remains the same. The tax alone, irrespective of the increase in gold price, is enough to discourage the domestic market. While also making the product uncompetitive for the tourist market.».
Problems in competitiveness
In fact, he makes special reference to the cruise industry, which does not prefer Greek jewellery as it can buy its counterpart from neighbouring countries that advertise their lack of luxury tax at our expense. This in turn leads to a reduction in consumption and therefore a reduction in public revenue as, when no sales are made, neither luxury tax nor VAT is collected.
The challenges of the industry
«It must be understood that behind the shiny shop windows there is a multitude of jobs and specialisations that produce the goods for sale,» he stresses.
According to ELSTAT data, in the decade 2012 - 2021 the number of employees in the sector decreased by 17%. As of the 7,280 enterprises of 2012, about 5,865 enterprises remain active today.
This downward trend stems on the one hand from the economic crisis and the covid-19 pandemic. But also from the overtaxation with the luxury tax and VAT on raw materials. These make the product more expensive than the European average and therefore uncompetitive.
As regards the luxury tax, the budgetary targets are far from reality due to the decline in consumption. The industry needs to revitalise productivity, extroversion. To introduce new styles and technologies so that Greek jewellery can regain the glory of the past.
Pounds and jewellery
Spyromilios also says that there is a movement in the sale of gold pounds by individuals to the Bank of Greece. This seems to be expected given the rise in the gold price.
However, he says that, as far as he knows, there is not much activity in the sale of jewellery. «As many jewellery items are not exclusively made of gold but also include gemstones, I think someone will think twice about selling a piece of jewellery based only on the increase in the price of gold,» he clarifies.
The prices of precious metals depend on the production of the mines and market trends.
Asked whether price levels have influenced consumer choices, he says that «consumers have always bought according to their purchasing power and industry professionals have adjusted their jewellery according to that power».
The gemstone market
The next question concerns his status as a qualified gemologist - diamondologist and valuer.
Mr Spyromilios explains:
«The gemstone market has stock exchange characteristics, so the prices are international, so you can't find big differences in prices of similar stones abroad. The quality of the stones is of course an important factor; the higher the quality, the higher the price. In recent years, the stones and jewellery sold have been accompanied by independent gemological reports (certificates) so that the consumer knows very precisely what he has bought, as the concept of investment is now increasingly recognised».
He notes that the prices of precious metals depend on mine production and market trends. When there is a high demand in the market for diamonds of a certain weight, then prices for that weight increase. There is a relativity between supply and demand.
When jewellery designers used black diamonds in their creations to influence fashion trends, the prices of black diamonds increased.
Prices are also influenced by fashion trends in jewellery. 20 years ago, for example, there was no demand for black diamonds so prices were low, but when jewellery designers used black diamonds in their creations influencing fashion trends, the prices of black diamonds increased.
Source: ot.gr
