As we find ourselves at the midway point of 2025, I’ve been talking to retailers across the country about some of the challenges that we all face at this point in time. Most retailers can be divided into two categories. There is that 10% that are having the best year in their company’s history. Sales are booming, business is fantastic, they’re having trouble keeping up with the demand, and their biggest problem is not being able to hire people fast enough to keep up with everything. I hate those people. Oh, stop it, I’m kidding. I’m just jealous.
Then there’s the other 90% where the current situation is kind of a struggle right now. There are a lot of factors in play that make turning a profit in the current environment somewhat difficult. But, many of our colleagues agree that the following, whether good or bad, are some of the leading factors.
A New Administration in Washington
Historically, when a new administration comes into office, the markets react. Some reactions are positive, and some are negative. The new administration’s policies are a complete 180 degrees away from the previous administration’s policies. Thus, the markets reacted.
The situation with the stock market over the last 5-6 months is simply a matter of the market repositioning itself. Most of the noteworthy moves in the market are generated by institutional investors. These investors are mostly index funds and EFT’s (exchange-traded funds). These funds can move markets due to their massive size, with holdings in the trillions.
During rebalancing periods, with massive inflows and outflows, they can shift the entire makeup of the market. Let 3 or 4 of these EFTs make some of the same moves, in the same month, and headlines will be created. We are in one of those rebalancing periods as we speak. Personally, I feel like we’re at the end of the roller coaster ride that we’ve been on since the first of the year.
The Price of Gold
This is one of those things that I’ll never understand. The price of gold makes no sense to me. I can’t count the number of times I’ve been asked if gold is a good investment, simply because I’m a jeweler. Honestly, I just don’t know. To me, gold is just a raw material that I have to buy to run my business, just like electricity, but I’m not a commodities broker.
For people that are new to our industry, gold sat at around $300 to $400 an ounce for decades. Check out these average yearly prices;
1975 – $160.86
1979 – $306.68
1985 – $317.26
1996 – $387.81
2005 – $444.74
Then everything started to change in 2007 at the beginning of the Great American Recession. Gold shot up to $695.39. At that time, people feared that our economy was about to collapse and gold was a safe fallback investment. It’s never dropped back down to the $400 range again. And, honestly, I really wish it would. Here’s what happened next.
During 2008 and 2009, gold averaged around $950. Yikes.
During the 2012 through 2019 time period, gold averaged around $1,250 an ounce. Yikes again.
2020 through 2023, gold averaged around $1,800. Then in 2024 it jumped to $2,600. Yikes 3x.
Now, here we are in 2025, and it’s just stupid now. I swear there is no rhyme or reason to the price of gold, but it’s just something we all have to deal with. But I’ll never understand it as long as I live.
Tariffs
I think this whole tariff dustup is just going to be a bump in the road, not a long term debacle to work around like the price of gold. The United States is the biggest customer in world for most of the products produced. Every company on the planet wants to sell their products in America. Tariffs are nothing more than elected officials, with motivations that most people can’t understand, having a political tussle with elected officials in other countries, at the detriment of
everyone else involved. Fortunately, these political power plays always work out in the end because, like the stock market, everything will rebalance. Wouldn’t it be nice if we could just get to the rebalance without the political power play first?
Inflation
The cost of everyday life goes up and down with inflation. When inflation is high, costs are high. When inflation is low, costs are low. It appears that currently inflation is trending downward. And, it appears, to be on track to continue that downward spiral. I’m for it!
We are all in a business that relies on discretionary spending. We get our customer’s ‘extra money’, not the money that they use to pay their mortgages, car payments, groceries, and gas. For the last several years, due to inflation, we’ve been competing with the grocery store and the gas station. Now that inflation is trending downwards, our customers hopefully will have some of that extra money to throw our way again.
Lab Grown Diamonds
Like it or not, they are here to stay. As an industry, we all just have to deal with it. While many in our industry are still on the fence, there are people out there ‘banking the jack’ selling lab grown every day. Regardless of your position on lab grown diamonds at the moment, remember that we survived Strontium Titanate, YAG, GGG, Cubic Zirconia, and Moissanite. I’m pretty sure we’ll all survive lab grown diamonds as well.
The Current Immigration Situation
I’m going to let everyone in on a little secret here. There have always been people in our industry that are not, what some would consider, ‘legal residents’ of the United States of America. Through the years, I’ve known many of these people. Some of the finest craftsmen I’ve ever met did not have legal standing in this country. These craftsmen come from countries all over the globe.
I’ve talked to a lot of people, in many other industries, that are affected by this as well. They have employees that have stopped coming to work. That means their jobs are running behind. That means their cash flow is directly affected. And, for the record, their cash flow is that extra money that we all rely on. It has a real ripple effect through the entire economy.
But, with all of the above challenges that we all must navigate, I think I know what is really top of mind for everyone. That one thing that is really causing a serious divide in this country. We all know what it is. And none of us understand it, but we have to hear about it all day, every day:
The Real ID!
Oh, the humanity…
Also, if you’re going to RJO in Chicago this July, be sure and look me up and say hi. I’ll be there working with the bench jeweler education classes.
