With the price of gold reaching levels not seen in 27 years, independent and family jewelry retailers are the first to feel the pinch as the crucial holiday season begins.

Gold, platinum, silver and diamond costs have been rising for a number of years. But over the past three months alone, gold prices surged about $200 to $850 an ounce as a weak dollar, record high oil prices and concerns about the economy have made the precious metal an attractive, stable investment. Volatility has also increased, with swings of up to $20 and $30 a day, causing more headaches for retailers.

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