Jewels keep their luster amid coronavirus pandemic

Gold rings and precious stones are displayed for sale inside a jewelry store in Hanoi, Vietnam, on Thursday, Jan. 17, 2019. — MAIKA ELAN/BLOOMBERG

By Joseph L. Garcia, Reporter

BOREALIS CRYSTALS continues to make money from jewelry sales amid a coronavirus pandemic, though it had been difficult to sustain operations due to supply and manpower constraints during the lockdown.

“We still made a profit in August, but it went down by quite a lot,” owner Czarielle Formalejo said in an e-mail.

“Gold sells far better than silver for us,” she said. “Customers don’t usually tell us that they’re purchasing our items as investments. Often they tell us that these will be heirloom pieces to be kept for sentimental purposes.”

BW Bullseye 2020-focusA pandemic that threatens health and lives urges people to pat their own thinning pockets, and wonder if their old adornments can help build a bridge to the new normal.

While most countries have abandoned the use of the gold standard after World War II, gold continues to capture the world’s markets and imagination.

“Gold has been a reliable store of value for thousands of years and since ancient civilizations,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an e-mailed reply to questions.

Gold is more tangible and has an underlying value, unlike currency notes that are certificates of indebtedness of governments, he added.

“There is also a cultural aspect in the use of gold and the demand for it,” Mr. Ricafort said. “Some societies use gold as gifts, such as in India especially during weddings, making it a major global market for gold.”

World gold prices rose to a record $2,075 per ounce on Aug. 7, or up by about 28% since the year started, Mr. Ricafort said.

This as bond yields in the US and other developed countries fell to new lows of close to 0% or even negative in other countries, narrowing gold’s disadvantage as an investment that does not have interest rate returns unlike bonds and other fixed-income instruments, he added.

Gold prices have gone up by more than 80% in the past five years, he pointed out.

“Gold is considered a real asset and no one’s liability, said Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines. “Gold can be buried underground for years and never lose its value.”

“If you were lucky enough to buy gold in 2016 when the price was at an all time 10-year low of $1,050 per troy oz, you would have indeed made a sound investment,” Josef Sagemuller, a jewelry specialist at Salcedo Auctions, said in an e-mail.

More Filipinos have been investing in gold and jewelry during the pandemic, with online jewelry stores springing on Facebook, according to Jean Henri Lhuillier, president of Cebuana Lhuillier Pawnshop and the Chamber of Pawnbrokers of the Philippines, Inc.

Foreclosed jewelry pieces at pawnshops have also become popular targets of entrepreneurs who eventually sell these on Facebook Live, he said in a statement on Sept. 7.

“Based on the actual inventory of Cebuana Lhuillier’s foreclosed jewelry, the number of Filipinos who have been buying these items is growing,” Mr. Lhuillier said. “In fact, even during the quarantine period, the number of buyers significantly increased.”

He said more people are now seeing the value of jewelry and gold especially during the crisis. “You would be surprised by the types of jewelry being pawned off. Some are even heirloom pieces and sold at very good prices.”

Speaking of crisis, the sale of the Romanov collection — one of the world’s largest jewel collections from Russia’s last ruling dynasty — remains to be one of the best-documented cases of the role gems play in a crisis.

“Gems lost their magic and were prized solely for their monetary value,” according to the book The Flight of the Romanovs: A Family Saga by John Curtis Perry and Constantine Pleshakov. “Now, only the prosaic matter of survival counted: medicines, bribes for border guards, or daily bread,” according to the book about the survivors of the Bolshevik purge of their former ruling dynasty.

“Another advantage of jewelry investment during the crisis is that these are not as regulated as the flow of currencies that move from one bank or country to another,” Mr. Ricafort said. “However, jewelry, especially those involving huge amounts and physically larger may be regulated by Customs authorities at various ports of entry.”

Such was the case with the cache of Imelda R. Marcos, whose 60-piece jewels Greek national and Marcos crony Demetriou Roumeliotes had tried to smuggle out of the Philippines in 1986, when the late dictator Ferdinand E. Marcos was ousted by a popular uprising.

The Customs bureau seized the jewels from Mr. Roumeliotes at the Manila International Airport as he was about to leave the country. The Presidential Commission on Good Government (PCGG) has been trying to sell the jewels for years.

One of the pieces left behind by Mrs. Marcos was also left behind by the Romanovs — a pearl and diamond tiara made in 1841 for Empress Alexandra Feodorovna (born Charlotte of Prussia), the wife of Czar Nicholas I.

“The tiara was seized in Malacanan Palace together with other jewelry items, on or shortly after Feb. 25, 1986 and transferred to the Bangko Sentral ng Pilipinas on March 1, 1986,” according to the PCGG. “It is part of the Malacanang Collection.”

Jewelry is usually evaluated in terms of the quality of the stones used, the purity of the gold and the craftsmanship, Mr. Sagemuller said. “Jewelry hardly ever depreciates in value but you have to be aware of what it is you are buying, and do your research.”

“When you choose to invest in quality stones and pieces, you will be able to hedge your savings and money from inflation, hyperinflation and economic crises,” he added.

It’s not enough that a piece of jewelry bears the name of the world’s most famous brands. “Cartier, Bulgari, Tiffany and the other jewelers are good investments because they usually keep their value over time,” Mr. Sagemuller said.

“However, the more common pieces that are mass produced will not appreciate as much as their haute joaillerie or high-end jewelry counterparts. Always buy stones of high quality in as big a size as you can afford,” he added.

Part of the attractiveness of jewelry as investments is in the meaning we give them. The Dowager Empress of Russia refused to sell her jewels because they served as a tangible link to her life before being forced into exile.

“The attractiveness of gold transcends many things,” Mr. Asuncion said. “Gold and the love for it may also be equated with greed, and sometimes, too much greed.”

Ms. Formalejo, mentioned at the outset, said emotions play an integral role in jewelry purchases. “Being a luxury item, it’s not a usual, everyday purchase so there’s a lot of thought that comes into it as well.”

Aja Raden, designer and author of Stoned: Jewelry, Obsession, and How Desire Shapes the World said of jewelry: “They’re not objects that can kill, or objects that can cure, or build, or even think. Jewels have one, and only one, real power: They reflect our desires back to us and show us who we are.”

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