Precious Metals: Buying Smart
When it comes to jewelry, what prompts you to buy?
Here are a few reasons why any of us might act when you see a piece. This list is by no means comprehensive, but I hope at least one of the items below is relatable:
“I buy a piece of jewelry when it:
- tickles my emotions. My heart pounds, I feel calm, etc..
- celebrates a special occasion.
- is popular: a lot of people are wearing something similar.
- supports my professional voice. It shows others I’m a leader.
- is inexpensive and pretty.(1)
- is fairly priced.”
I suspect the last item on the list is the trickiest, and why I’m writing this blog. Jewelry pricing is somewhat mysterious, and myths about markups abound. Most production jewelers start building the price for a specific piece considering the cost of the metal and gems used in the item being produced. I continue by adding actual costs associated with production, labor and photography. Finally, there are hourly expenses not specifically factored into the cost of a particular piece. Here are a few examples of those hourly expenses:
Negotiating, maintaining, and enhancing supply chains are essential to a vibrant business.
Design time, bookkeeping, marketing, and finally, research, take time. Here is an example of what I call research: I adore working with customers on custom pieces. Many times, customers ask me to find a particular gem at “the best” price. I embrace these requests joyfully and have been known to search the world for days by email and calls. I am thrilled when I deliver on the promise and my customer is blown away.
This blog focuses on a major factor contributing to a piece’s price: the cost of the precious metal used. When you know what to ask for, you can control this component by asking the jeweler to create the piece using a metal of your choice.
How
The picture below shows my three-strand necklace Sky Mountain. A customer in Great Britain asked if the price would come down if we deleted a strand. I was honest and said no, but she could commission a similar necklace using a sterling silver rather than a white gold clasp, and the cost would drop dramatically. Read a little further, and you’ll see why.
What are Precious Metals?
According to Investopedia, precious metals are metals that are rare, have a high economic value, are scarce, and retain their value over time. Gold, platinum, and silver are the most popular precious metals.(2) All precious metals are commodities, just like wheat or oil. They are sold daily on international markets. Today’s price will probably not be the same tomorrow, so treat daily prices as a snapshot. Pricing trends tell you more about holding or selling a piece of jewelry constructed of any precious metal.
Gold: Pros and Cons
The following chart unveils my understanding of gold pricing.(3) Before discussing the chart, and in the spirit of transparency, Peggy Herrman Fine Jewelry relies on 14k gold for two reasons: 1. gold feels comparatively expensive, and I like to maximize value for my customers; and 2. I’m cautious about offering anything in higher grades of purity like 18k gold. Higher grades cost more and are softer than 14k. That means higher grades bend easier and wear faster than 14k.
| Karats | Details |
|---|---|
|
9-10k gold
42% gold - 58% filler metals |
9-10k gold is common in North America. The price is attractive, currently selling for about $26 USD per troy ounce.(4) Yellow is the natural color of gold, but the intensity of yellow drops when a gold is composed of more filler. Therefore, 9-10k gold is relatively dull and not used in fine jewelry.
|
| 14k gold 58% gold - 42% filler metals |
14k gold is common in America and Europe. The price per troy oz. is currently a little higher than $1,000 USD.
While people think of gold as yellow, other colors exist. White gold combines yellow with alloys of nickel, palladium, zinc and copper. Rose gold combines alloys of silver and copper. Green gold combines alloys of silver, copper and zinc, and there are more. The Studio currently offers yellow gold as well as white and rose gold in our charms.
|
| 18k gold 75% gold - 25% filler metals |
18k gold is common in Italy and Portugal and is offered by many fine jewelers in North America. The current price per oz. is about $1,400 USD. |
| 21k gold 75% gold - 25% filler metals |
21k gold is common in India and Arab countries. The current price per oz. is about $1,700 USD. |
| 24k gold 99% gold - 0.1% filler metals |
“Pure gold,” is preferred by customers in China. The current price per oz. is about $1,900 USD. |
Silver
Of the three precious metals, silver is the least expensive. At present, silver is selling for around $20 USD per troy oz. Descriptors like sterling silver and 925 silver refer to the same alloy of silver containing 92.5% pure silver and 7.5% of other metals, usually copper. The Studio relies on sterling or 925 silver.
Confession: out of ignorance I used to disparage silver because it can tarnish. But, if you wear a silver piece a lot, it tarnishes less. And, any silver piece comes with a little piece of black cloth in an organza sack. The sack prevents scratching. I store all inventory in these sacks. The little black cloth retards tarnish. Retaining both the organza sack and the black cloth will dramatically lengthen the life and vitality of any silver jewelry.
The adage that a picture is worth a thousand words holds true when you look at the next picture I found on Reddit.com.
Can you see the difference between 1 troy ounce of gold and the comparable value of fine silver?
Platinum
Platinum is a wonder metal. First, of the three precious metals, it is pure, not an alloy. That means the look of platinum over the years does not fade. With age, it looks softer and more loved, similar to fine leather. Second, the current price is less than $1,000 USD per troy oz. Finally, platinum is environmentally and medically beneficial. It is used in catalytic converters to reduce air pollution and as an essential component of many medical devices, including pacemakers, implantable defibrillators, catheters, stents, and neuromodulation devices. The studio does not offer pieces in platinum because to do so requires different equipment than is used for gold and silver, but we hope to in the future.
Buying jewelry for yourself or giving a piece should be a joy filled experience.
Online shopping has revolutionized the way people shop. It provides a wide range of choices and the ability to make purchases that align with specific values and preferences. Here are some ways in which online shopping offers freedom and fulfillment:
Product Variety: Online stores like Peggy Herrman Fine Jewelry offer a wide selection of jewelry pieces that you can explore and customize. A customer just asked me to customize a pair of earrings. The result is a joy for me and a satisfied customer.
Price Comparison: Peggy Herrman Fine Jewelry makes it easy to ask for price comparisons. Customer service and transparency enable you to make cost-effective choices that align with your budget.
Product Information: Detailed product descriptions, reviews, and ratings are readily available at Peggy Herrman Fine Jewelry.
Customization: I offer customization options for products, and will do more in the future.
Ethical and Sustainable Shopping: Online shopping also provides a platform to support ethical and sustainable brands like Peggy Herrman Fine Jewelry. My business model focuses on slow production in the United States and prioritizes the use of precious metals, prioritizing environmental and social responsibility.
Convenience: Online shopping offers the convenience of shopping from anywhere at any time, which can lead to a more relaxed and enjoyable jewelry buying experience.
Accessibility: Online shopping breaks down geographical barriers, making it possible for people to access products internationally. Peggy Herrman Fine Jewelry has wonderful, satisfied customers across the United States, Canada, and in countries in the United Kingdom.
Freedom to shop and ask for what meets your needs are both things that align with the values of Peggy Herrman Fine Jewelry.
Best, Peggy
- Throw-away pieces are generally any piece of jewelry constructed of a shiny coating over a base metal such as bronze or copper. With wear the coating disappears and the base metal shows through. Throw-away pieces are OK as long as you consider the pitfalls, including the cost to our environment.
- https://www.investopedia.com/terms/p/preciousmetal.asp
- An adaptation of explanations provided by https://learningjewelry.com/
- Precious metals are measured in troy ounces, equivalent to 31.21 grams. The troy ounce was used as a unit of measurement in Troyes, France. See https://www.physic
