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Gold Price Pushing Past Key Resistance Levels

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The past month activity on the international gold price push the price up by about 29%.  The closing as at June 7, 2010 is US$1,293 per troy oz.  So we have to keep abreast of the price of gold closely.

The following charts show the price of gold for the past month and for the past 5 years.

Chart courtesy: http://www.goldprice.org
Chart courtesy: http://www.goldprice.org

The following article is plucked from http://goldinvestingnews.com by

By Melissa Pistilli,

June 7, 2010

Gold’s safe-haven appeal was amplified Monday as the euro weakened further against the dollar amidst rising fears the financial crisis in Europe is deepening and a double-dip global recession may soon be in the cards.

Gold gained nearly $13 Friday to close at $1220 an ounce in New York. In early trading Monday morning, those gains were nearly erased as the yellow metal dropped as low as $1209.80 an ounce. Traders took profits in gold in an effort to cover losses in other investments after the DOW dropped over 3 percent Friday on disappointing US unemployment data and markets around the world weakened on ongoing global economic concerns.

But a late morning $20 bounce put a smile on every gold bug’s face, and by mid-day the precious metal had shot above $1240 an ounce, hitting a high of $1246.20 late in the day. Prices backed off a bit to close at $1241.30 an ounce on the COMEX.

Gold’s biggest jump in four weeks came at Hungary’s expense. The European nation may be facing a similar debt crisis to Greece. This possibility is further stirring the pot of fear and apprehension threatening to boil over in the region, and in the world for that matter, as some top economic analysts are warning of more financial troubles ahead.

Investors are moving out of the euro and into alternatives like the dollar and gold. Gold priced in Euros reached a record high of 1,035.27 as the euro dropped below $1.19, a level not seen since March 2006.

The ongoing sovereign debt crisis in the euro zone continues to provide support for gold prices despite a rising dollar. “There’s a big acceleration in gold prices because people see future deterioration in the euro-zone,” said Lind-Waldock senior market strategist, Adam Klopfenstein.

“Speculative traders such as investment funds or banks are buying back previously sold positions, betting that the metal will continue to reverse its recent dip that took it below $1,200 last week,” reported The Wall Street Journal.

For now, analysts advise gold market watchers to keep an eye on the euro. “If you start to see the euro stabilize, there’s no flight-to-quality need to own gold,” said Matt Zeman, LaSalle Futures Group metals trader. And with a lot of debate over the problems but no talk about viable solutions, the financial issues in the euro zone aren’t expected to clear up anytime soon.

Range-Bound

Gold’s safe haven appeal brought it up to a record high of $1251.40 an ounce in the middle of May. Yet, gold prices have remained range-bound between $1180 and $1240 an ounce for a month now and may continue in this pattern given the current price drivers.

Once gold prices fall below $1190 an ounce, investors spot a good buying opportunity, sending prices higher on discount buying. When the shiny metal breaches $1230 an ounce, large buy orders at European financial institutions are triggered, sending prices hurdling towards $1240 an ounce. Both these levels are now providing support with key resistance seen at the $1240 level at which point investors seek to sell gold to raise cash to buy stocks or cover losses, often sending prices back down near or below $1200 an ounce.

Many analysts expect this tight trading range to continue. Global financial fears will help keep prices supported around $1198 with a top level of about $1230 an ounce, concludes Scott Meyers, MF Global Pioneer Futures Division analyst.

Despite being range-bound for now, some analysts see this as a short-term phase in a long-term uptrend. “The market is on a longer-term and sustainable uptrend,” said Peter Hillyard, head of metal sales at ANZ Bank. “If you detach yourself from the minute by minute, this market is heading higher.”

Luxury Brand Diversification Does Have Limits

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Bulgari Chief Executive Francesco Trapani speaks during the Reuters Global Luxury Summit in Paris June 2, 2010

(Reuters) – There are limits to how far a luxury company can diversify its operations without diluting its brand or confusing consumers, luxury executives and experts said this week.

A jeweler might successfully launch a perfume but a handbag maker might not and it is easier for a jeweler to look credible producing watches than it is venturing into making handbags, they said.

Brands are sensitive, associated to values and emotions which are not suitable to every product.

Italian jeweler Bulgari is investing significantly into soft leather goods, hiring a high-profile designer, opening dedicated stores and launching an advertising campaign.

But many analysts are skeptical Bulgari’s move into handbags will be successful.

Bulgari Rome

“Diversification into new areas, which you do not really master, can be risky,” Isabelle Ardon, head of Paris-based luxury fund SG Gestion told the summit this week.

But Bulgari Chief Executive Francesco Trapani said he believed the brand was strong enough for its diversification to succeed.

“We want leather goods to become a significant part of our business,” he told the summit.

Bulgari New York

The Italian company is keen to build up its “soft luxury” business because it traditionally makes much bigger margins than “hard luxury” such as watches and jewelry.

But the luxury industry is full of examples of failed attempts to branch out.

German pen maker Montblanc, part of Richemont, is widely cited as a brand whose fine jewelry venture took many by surprise as it is closely associated with men’s accessories.

On the other hand, Louis Vuitton’s move into high jewelry fits the brand’s exclusive image, luxury experts have said. The same goes for Hermes who hired designer Pierre Hardy to produce a fine jewelry collection launched in April.

Hermes, originally a saddle-maker, also started branching out more than a century ago, which gives it more legitimacy than others.

“Diversification is rarely a driver, more a potential benefit,” said James Lawson, director of London-based luxury market research specialists Ledbury Research.

He said Hermes was a good example of a single brand that has maintained its premium focus within the sector and weathered the storm well.

Family-owned leather goods maker Longchamp, whose logo is a man on a racing horse, recently started selling raincoats and jackets in its boutiques.

But the venture is an experience for now, not a new strategic direction for the company, Longchamp Chief Executive Jean Cassegrain told the summit this week.

He said the company did not have any plans to go into anything else, such as perfume.

“We are trying to build the brand in a controlled and structured way,” he said.

“We would not have anything to say about perfume. There are too many brands that stand for little now aside from their perfume.”

Alain Crevet, head of French luxury pen and lighter maker ST Dupont  said the brand’s failed venture into ready-to-wear plunged the company into loss and shutting it down was the first thing he did when he joined it four years ago.

“I’m really convinced that in luxury, you have to be inspired and understand your brand history, your brand roots and your brand DNA,” he said.

Luxury goods’ core products have been selling better during last year’s downturn than peripheral ones, U.S. consultancy Bain & Co said.

“Consumers prefer to buy a brand’s best known products rather than items outside their main brand heritage,” Bain said.

Other executives acknowledged diversification helped promotion more than revenues.

“We have a small hotel business, but this is more a public relation machine,” said Bulgari’s Trapani, adding he was not looking to branch out into new areas.

Source : Reuters

June 2, 2010

Celebrity Ad Bandwagon A Costly Trend

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(Reuters) – Luxury groups are increasingly jumping on the celebrity advertising bandwagon to make their voice heard and boost sales, a trend that puts pressure on margins and which is here to stay, luxury executives believe.

Lossmaking Italian jeweler Bulgari resisted celebrity ads for years, preferring to invite VIPs to its shows or events, but it recently caved in, sending its costs soaring.

“We are more and more into celebrities. They make your brand visible,” Bulgari Chief Executive Francesco Trapani told the Reuters Global Luxury Summit this week. “But of course, our communications budget has gone up.”

In January, the Rome-based brand launched its first global advertising campaign in glossy magazines which featured actress Julianne Moore lounging naked on a sofa, adorned with large emerald earrings, two white parrots and a camel-color handbag.

“Since then, we have had people coming into our shops asking for the Julianne Moore bag,” Trapani said.

Bulgari has hired the actor Clive Owen for its men’s perfume campaign which will be launched in September.

Trapani said it was becoming increasingly difficult to find celebrities who were not used by other brands. The trend is also creating a bidding war for certain personalities, which makes it tough for smaller luxury brands to compete.

“Using superstars creates significantly high barriers of entry. You need considerable means,” Cerruti Chief Executive Florent Perrichon told the summit this week.

“But celebrities are now part of the business and they will remain so,” he said.

Louis Vuitton and Hermes have used the downturn to grab more advertising space and crush competition.

Cerruti, which is trying to rise from the ashes after going bust in 2004, has just hired the French singer Marc Lavoine for its 1881 campaign and admitted it was part of the reason why the company would not be profitable again this year.

“The problem with using celebrities is that it works, that is why everybody is doing it,” Perrichon said.

French handbag maker Longchamp said it had seen a notable spike in the sales of a bag designed by supermodel Kate Moss, the maison’s face since 2006, even though she features in other ads such as Yves Saint Laurent’s perfume La Parisienne.

Celebrity endorsement has doubled in the last decade, according to a report cited by the marketing website www.brandchannel.com.

TOO MUCH LIMELIGHT

But relying too much on celebrities can be dangerous, analysts say.

“There is a natural limit to this marketing technique: if it becomes over-used, consumers recognize ambassadors are doing it for the fee which can damage the brand,” said James Lawson, director of luxury market research specialists Ledbury Research.

He said high profile ambassadors did not work for all brands and they were no guarantee of success, particularly for smaller names.

Also, the reputation of a celebrity can change quickly. Tag Heuer dropped Tiger Woods after the golf champion was lambasted by the media over his extra-marital affairs.

But some super stars such as Kate Moss are more immune. A few years ago, Burberry suspended its contract with the model after she was hit by a drug scandal. But very quickly, she was back on the cover of Vogue and in luxury brands’ adverts.

“For me, using a celebrity for your brand is a sign of weakness,” said Jean-Marc Jacot, chief executive of luxury watch maker Parmigiani Fleurier.

He acknowledges that Parmigiani Fleurier, which is not even 10 years old, does not have cash for advertising. But he lets it be known that people such as Melinda Gates, wife of billionaire Bill Gates, and Russian Prime Minister Vladimir Putin own a Parmigiani watch.

French luxury and pen maker ST Dupont, which also does not have funds for advertising, makes targeted presents instead.

Since its Chief Executive Alain Crevet offered a black lacquered pen to French President Nicolas Sarkozy to congratulate him on his 2007 election victory, ST Dupont has become a regular supplier of the Elysee Palace.

But the use of celebrities is not appropriate for every brand. For example, Buccellati, the fine Italian jeweler favored by European monarchs and actresses, avoids the star system.

“We are not really in favor of celebrities. Our brand is known well enough,” Buccellati Vice President Andrea Buccellati told the summit this week.

Instead, the jeweler said it preferred to organize private shows and events to build personal relations with customers.

Source : Reuters

June 4, 2010

Rubies – A Poetry

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THEY brought me rubies from the mine,

And held them to the sun;

I said, they are drops of frozen wine

From Eden’s vats that run.

 

 

I looked again,–I thought them hearts

Of friends to friends unknown;

Tides that should warm each neighboring life

Are locked in sparkling stone.

 

 

But fire to thaw that ruddy snow,

To break enchanted ice,

And give love’s scarlet tides to flow,–

When shall that sun arise?

 

–  Ralph Waldo Emerson

 

 

 

 

 

 

Panning For Rubies In Mogok

 

Jewelry Trade Fairs Calendar – Posted May 31, 2010

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International Jewelry Fair - Calendar 2010

Jewelry Trade Shows are getting very important as a place where international buyers and sellers meet.

The exhibitors profile includes silver, antique jewellery, pearl, diamond jewellery, gold jewellery, silver jewellery, diamond, pearl, gemstone, ruby, sapphire, platinum, gold, emerald, crystal, equipments and accessories of jewellery making and much more related to industry.

The visitors profile includes wholeseller related to jewellery, jewellery retailer, jewellery manufactur, jewellery designer, gemmology, student, jeweller, agent, distributor, department store buyer.

Below is a list of the Trade Exhibitions.  Do pay a visit to gain some insight into the world of jewelry.

INTERNATIONAL GEMS & JEWELRY SHOW – The Mirage Casino Hotel, Las Vegas  – May 31 – June 3, 2010

JCK LAS VEGAS, June 4 – 7, 2010

CHINA INTERNATIONAL GOLD JEWELRY & GEM FAIR – June 17 – 20, 2010

HYDERABAD JEWELRY PEARL & GEM FAIR – June 18 – 20, 2010

HONG KONG JEWELERY & GEM FAIR – June 24 – 27, 2010

JA NY SUMMER SHOW – NEW YORK CITY – July 25- 28, 2010

SINGAPORE INTERNATIONAL JEWELLERY SHOW – July 29 – August 1, 2010

JAPAN JEWELLERY FAIR 2010 – September 1 – 3, 2010

BANGKOK GEMS & JEWELRY FAIR – September 7 – 11, 2010

MALAYSIA JEWELRY FESTIVAL 2010 – October 8 – 11, 2010

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