This is how you win — invest in gold.
After hitting its sharpest daily drop in nearly seven years, gold is rebounding, making it the perfect time to buy, according to the real life jeweler from “Uncut Gems.”
Maksud Agadjani is the founder of and president of New York-based luxury jewelry shop, TraxNYC. He also starred as “Yussi” in the 2019 hit Adam Sandler thriller “Uncut Gems.”
Agadjani told Yahoo Finance’s “YFi PM” that gold has been a constant and stable commodity.
“When I entered the marketplace, an ounce of gold... was about $400,” Agadjani said. “Now it's about $1,600. That was 15 years [ago]... And I've been studying the charts. I've been following them every single day for those 15 years. And you know, $1,600 is maybe 25% off the high or something like that. And I don't see it going down below $1,000 an ounce.”
Gold has historically been a popular investment due to its status as a commodity. After falling nearly a quarter in what was considered the worst months of the 2008 financial crisis, gold rallied to nearly $1,900 an ounce, proving its ability to weather even the harshest of financial storms. (Because gold has kept its value over time, it serves as a form of insurance against adverse economic or market events.)
The price of gold has risen more than 4% year-to-date.
“When you purchase a gold chain, even though you're paying a markup, over the course of 10 years, 15 years, you could pay for that markup with the value increasing, which is in and of itself, inflation is minimum 2% a year,” Agadjani said. “So that will automatically pay for the markup on any gold purchase that you have. It's always very liquid.”
Big names pull big profits on gold jewelry
Keeping a bar of gold bullion in your safe may be better for your portfolio than wearing a chain or watch, Agadjani said.
“You're not going to be paying the gold spot price when you're buying jewelry. You're going to be paying labor costs,” he said. “You're going to be paying the costs of operating a business, and the business owner markup and things like that.”
”So you're going to be paying sometimes close to double the spot price,” he continued. “And if you're shopping from Tiffany or Cartier, you're going to be paying maybe 500% more than what the spot price is.”
Luxury brands such as Tiffany & Co. (TIF), and Cartier subsidiary Richemont (CFR) have both seen a decline in sales because of the coronavirus outbreak in Asia. Sales of luxury goods such as jewelry and watches plummeted by 41.6% in January compared with a year prior, according to Hong Kong’s Census and Statistics Department.
“[When] the great recession came, it took about three months of lag before [my business] felt it,” Agadjani said. “So you know, whatever happens now, unless you're in the hotel business or the airline business, you're not going to feel it until three months out.”
Chelsea Lombardo is a production assistant for Yahoo Finance. You can find more of her work here.