Clock strikes gold for soaring prices
A billionaire Texas oilman's gold-laden treasure became Warren Schweitzer's gold-nugget nightmare.
"I thought I was going to go to my grave with this," Schweitzer said Friday as he clutched a 1970s custom Rolex with five ounces of gold nuggets and three carats of diamonds.
Schweitzer, who owns Pittsburgh Coin & Jewelry Exchange on Liberty Avenue, Downtown, has seen his fortunes rise along with the price of gold, which reached a 27-year high last month of $845 -- $5 shy of a record set in 1980.
The gaudy watch -- which he bought in a lot with two other Rolexes -- is finally worth its weight in gold.
"It's finally worth more than the sum of its parts," Schweitzer said. "I couldn't give it away to save my life. ... But gold finally caught up."
Gold mania has driven more customers to his store, and others Downtown. Business has doubled at Embassy Diamond, a Liberty Avenue business that buys and sells used jewelry, watches and coins, its owners said.
Gold prices have been buoyed by investors who buy the precious metal as a hedge against a weak dollar and inflation.
The Labor Department yesterday said consumer inflation spiked in November by the largest amount in more than two years with higher gasoline prices and food costs. Rising gas prices also helped drive wholesale inflation to its highest level in more than 30 years. Gold, however, closed down $5.50, settling at $793.10 an ounce, still well above historical levels.
Yet some sellers, especially those who bought jewelry at retail, should not expect robust returns.
Sarah Mahoney, 20, of Baden learned that while trying to sell four gold necklaces, including one she bought for $500 a few years ago.
Her frustration boiled over when her top offer was $60 -- for all the pieces.
"I expected that one necklace alone to get at least $100," Mahoney said. "I'm sure the market is great if you were trying to buy jewelry."
Gold and the dollar usually trade in opposite directions, and that trend has been strong in recent months. Some think that could bode poorly for gold prices.
The dollar yesterday surged to trade at its highest since early October and gained on the Euro, which dropped to $1.4441 from $1.4624 on Thursday.
That put pressure on commodities prices, including gold, oil and copper.
Should the dollar continue to be weak in the long term, gold prices could benefit.
Some analysts remain bullish on gold.
"Next year should be a very good year on the investment-demand side of things," said Bill O'Neill, principal of LOGIC Advisors. "There is enough going on in outside areas, with potential pitfalls, that flight-to-quality demand is going to be there for hard assets."
Schweitzer said he's heard analysts predict prices as high as $1,200 an ounce next year, but he called those predictions "pure speculation."
Still, he's enjoying the roller-coaster ride.
"It's made it interesting," Schweitzer said. "I'm having fun with it."
