One constant for the last couple of thousand years is said to have been the relationship between a quality men's suit and the price of gold. A very good man's suit cost about one ounce of gold. Gold closed today around $1444. Another thread suggests pretty good suits can be bought for around $500 or less. Does this suggest gold is over-priced and headed for a sharp drop? Or do members feel something around $1500 is the price point for a good suit now? If we look at bespoke does it presage a sharp rise in metal prices?
cdavant
TORONTO--(BUSINESS WIRE)--When it comes to an amusing idea rooted in serious discussion, Sionna Investment Managers’ aptly-labelled Gold-to-Decent-Suit Ratio is as close to historically accurate as any other well known ratio in pegging the price of an ounce of gold to the price of a decent suit.
“But I will say that I can get a really decent suit where I shop for a lot less than the price of an ounce of gold these days.”
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While analysts, market watchers and gold bugs across the world speculate on the price of the precious metal, research by Sionna Investment Managers shows the cost for an ounce of gold in 1967 was C$35, exactly the same price as a decent suit from Eaton’s, a prominent Canadian retailer at the time. In 1975, gold weighed in at C$100 an ounce, a 1:1 ratio with a decent suit from Eaton’s during the same year. In 2009, the price of an ounce of gold in Canada soared to C$950, or the price of a decent suit at leading tailors during the same 12 months.
“The long-held rule in the marketplace is that an ounce of gold, historically, has been able to buy a decent suit. But then again, it may depend on where you shop,” says Sionna Portfolio Manager Mel Mariampillai, who is part of the investment team that helped develop the concept.
There are some startling similarities between the two products. “Gold has been having an incredible run and what people really want to know is where it will go. Although no one knows for sure, we believe that the price of a decent men’s suit and gold will converge to the same level,” says Mariampillai.
As of August 15, 2011, an ounce of gold cost C$1,723.19 (source: goldprice.org), represents a higher ratio of 1:1.5 to a Burberry London men’s black wool two-button suit on the same day at Toronto’s Holt Renfrew, a high-end Canadian department store, which costs C$1,150.00. (source: Holts Catalogue, Women’s & Men’s Fall Preview 2011).
Does the ratio now suggest that the price of suits will rise, or is the ratio signalling that the price of gold will fall? We know that wool prices have been rising recently, and this is expected to nudge up the price of clothing (including men’s suits) in coming seasons. Will it be enough to bring the ratio back to a 1:1 ratio? We don’t know for sure, but we do know that human nature creates price/value schisms and fuels volatility – especially in these types of markets.
“But I will say that I can get a really decent suit where I shop for a lot less than the price of an ounce of gold these days.”
.
While analysts, market watchers and gold bugs across the world speculate on the price of the precious metal, research by Sionna Investment Managers shows the cost for an ounce of gold in 1967 was C$35, exactly the same price as a decent suit from Eaton’s, a prominent Canadian retailer at the time. In 1975, gold weighed in at C$100 an ounce, a 1:1 ratio with a decent suit from Eaton’s during the same year. In 2009, the price of an ounce of gold in Canada soared to C$950, or the price of a decent suit at leading tailors during the same 12 months.
“The long-held rule in the marketplace is that an ounce of gold, historically, has been able to buy a decent suit. But then again, it may depend on where you shop,” says Sionna Portfolio Manager Mel Mariampillai, who is part of the investment team that helped develop the concept.
There are some startling similarities between the two products. “Gold has been having an incredible run and what people really want to know is where it will go. Although no one knows for sure, we believe that the price of a decent men’s suit and gold will converge to the same level,” says Mariampillai.
As of August 15, 2011, an ounce of gold cost C$1,723.19 (source: goldprice.org), represents a higher ratio of 1:1.5 to a Burberry London men’s black wool two-button suit on the same day at Toronto’s Holt Renfrew, a high-end Canadian department store, which costs C$1,150.00. (source: Holts Catalogue, Women’s & Men’s Fall Preview 2011).
Does the ratio now suggest that the price of suits will rise, or is the ratio signalling that the price of gold will fall? We know that wool prices have been rising recently, and this is expected to nudge up the price of clothing (including men’s suits) in coming seasons. Will it be enough to bring the ratio back to a 1:1 ratio? We don’t know for sure, but we do know that human nature creates price/value schisms and fuels volatility – especially in these types of markets.
I wouldn't say you could get a 'really good suit' for $500. The $1444 sounds a little high and gold has gone up recently. That range seems to contain less suits than the $1000 and $2000 range. My opinion is that one can get a really good suit for $800-$1200.
The actual cost of an OTR suit seems to be quite variable. You certainly seem to be able to find fully canvassed suits made by Hickey Freeman and the like for the $500-$700 range. But you probably get a better selection at a real haberdasher for nearer the $1500 range. I think the price of gold relationship is coincidental rather than causational.
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