What’s It Worth? When High Gold Value Transcends Reality

When gold value reaches historic levels the margin among retail evaluations gets confused because of a myriad of market conditions.

We bought the three 18-karat, 20-karat and platinum purses from a Manhattan antiques dealer for $42,000, which is 1 percent under scrap value. The first purse has over 3 carats of diamonds and small sapphires in an elephant body. The elephant turns to unlock the purse. It weighs 7.22 Troy ounces. The plain purse (bottom right) weighs 8.8 Troy ounces and the large ruby-, diamond-and sapphire-encrusted purse (bottom left) weighs 8 Troy oz.

The reason we paid under scrap was simply economic on the part of the seller. He held onto them for years trying to get 20 percent premium above gold pricing. As gold climbed over 25 percent, he realized that he could cash in and make over what he originally paid for them, when gold was $1,500 an ounce.

Here is the confusing part: to manufacture these today and sell them at the retail level would easily cost over $500,000. Typically, if a smaller piece of jewelry had fine gemstones and diamonds like these, even the fair market value would be several times the gold value. But in this case, there is so much gold that there are very few people who can afford to buy them.

If he scrapped them, he would only get 92-95 percent of the value because of the refining process, so he was happy to sell to us for 99 percent of the gold value, plus the value of the diamonds and the sapphires. Vintage Diamond and Ruby Ring 1.04 Old Euro Center Diamond Natural Ruby Halo Mounting w/14k WG Mounting.

We think the term “museum piece” is overused, but we believe the French-signed elephant purse could indeed be a museum piece. Another aspect is that it is a good way to “invest” in gold because we are only asking 10 percent over the gold and diamond value in our store. So gold would only have to go up 10 percent to recoup your money.

In this unusual case, it could be argued that the fair market value is only the amount of the scrap price.
If you have items with high gold content that you would like to sell, we would like to see them. We make house calls or will meet at your attorney’s office anywhere in Tampa Bay.

Former Sothebys.com associate. You have read about us in The New York Times and The Wall Street Journal.

St. Petersburg: 1131 4th St. N. 727.896.6656.
Tampa: Hyde Park Village. 1607 W. Swann. 813.875.3935.
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