Gold tops $1,000 an ounce; jewelry costs to follow

NEW YORK -- Bargain-hunting at the local jewelry store just got harder.

Gold, which has soared to record levels in the past year, hit a new milestone Thursday, rising to $1,000 an ounce for the first time in futures trading -- a boon for investors but a deterrent to consumers shopping for jewelry.

Michelle Findlay, a manager at a toll operator company in New York, said she has stopped buying pure gold pieces. Her latest buy was a silver bracelet plated in 18-karat gold.

"I noticed lately the price has been going up," she said, while browsing at Gold Panel jewelry store in New York. "I'll wait, definitely, for the prices to go down" before buying another gold item, she said.

The price of gold has jumped nearly 20 percent since the start of the year after rising nearly 32 percent in 2007. The huge advance is mainly the result of a weaker dollar and record-high crude oil prices. The dollar fell below 100 yen Thursday for the first time in 12 years and hit another new low against the euro, while oil traded above $110 a barrel Thursday.

Lower interest rates -- and the prospect of more cuts -- brings the dollar's value down and makes dollar-based commodities like gold and oil cheaper for foreign buyers. The weak currency has also made gold more attractive because the metal is a hedge against inflation.

After topping $1,001 on the New York Mercantile Exchange, gold for April delivery fell back to settle at $993.80 an ounce on Thursday. Analysts say gold could still go higher, especially if the Federal Reserve cuts interest rates again next week as expected.

When gold becomes more expensive on futures markets, it doesn't immediately translate into higher prices for jewelry. But in the long term, the price tags on gold rings, bracelets and necklaces do go up.

Exactly when the increases from this latest jump will show up on price tags depends at least in part on a retailer's size. Big retailers order products up to a year in advance and keep more in stock. Shoppers might see higher prices there by the end of the year. Independent jewelry stores, meanwhile, order products closer to when they appear on the shelves.