How the Value of the Canadian Dollar Affects Jewellery Prices: is it time for an appraisal?

We’ve been hearing it a lot lately: oil prices drop so the value of the Canadian Dollar is going down. While not all of this is bad news (i.e., the value of the Canadian Dollar going down can help with a resurgence in Canadian Manufacturing through exports), it does affect what we pay for diamonds and gold.

Here’s the scoop. Like many imports, diamonds and gold are normally traded in US Currency. When the value of the Canadian Dollar goes down, we pay more to exchange our CDN currency into US Currency.

For example:

  • On February 6th, 2014, one dollar US would cost us $1.10CDN.
  • On February 6th, 2015, that same US dollar costs us $1.25CDN.

CDN Dollar

 

For example, a $1000US Diamond on February 6th, 2014, would have cost you $1100CDN. But fast forward to February 6th, 2015, and that $1000US Diamond now costs you $1250CDN. That slightly more than a 13% hike. That’s quite the increase for one year, and the same goes for gold and all other precious metals.

These price changes are typically gradual, but have definitely started to take affect in Canada. Diamonds and Gold aren’t the only commodities to succumb to these changes, but just about anything being imported from our neighbours in the US.

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A major thing to take into consideration when you see these increases or decreases is the appraised value of your jewellery. Make sure your appraisals are up to date when you see price fluctuations stick; i.e., don’t chase the volatility, the market only changes when prices really stick.

It’s anĀ  inverse relationship:

  • If the Canadian Dollar goes down (such as is the case now), the CDN dollar value of your jewellery increases.
  • When the value of the Canadian Dollar goes up, the CDN dollar value of your jewellery decreases.

Make sure your properly insured. You don’t want to overpay or be under-insured.

Check with your trusted jeweller and see if now is a good time to have your jewellery re-appraised.

Kindest regards,

 

The La Mine d’Or Family


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