Gold Is So Expensive That Some Jewelers Are Simply Using Less of it Now

One way to avoid giving people shopping for gold jewelry sticker shock? Use less gold.  

That’s a tactic you can expect to see this year as the industry that sells all that glitters faces high prices for precious metals. Gold, which is coming off a record high reached in April, is up about 40% over the past year, and the most important time for the industry—the holidays—isn’t far off. 

Some designers are responding with approaches like hollow gold jewelry and gold plate. Others are making two-tone bling that combines gold and silver, or using golden-hued alternatives. (Higher-end customers, many say, are still expected to put up with higher prices for solid gold.) 

“Most shoppers don’t follow the commodities market, but they feel the difference when a simple gold ring now costs double what it did two years ago,” said Karen Moran, who owns Charleston, S.C.-based handmade jewelry brand Coral Strands.

Ankur Daga, CEO of Los Angeles-based direct-to-consumer jewelry company Angara, says the rise in gold prices is driven by inflation fears, economic uncertainty and geopolitical unease.

“None of these three things, in my opinion, are likely to go away anytime soon,” Daga said.

The ‘Weight and Feel’ of Gold, Without the Sticker Shock

The November-December stretch accounts for as much as 30% of overall annual jewelry sales, said industry analyst, Edahn Golan, founder of Edahn Golan Diamond Research & Data. Paul Zimnisky, an independent industry analyst, expects to see “clearer segmentation in price points this year” at jewelry shops. 

“You will see more expensive high karat solid gold pieces, but then also more gold plated and hollow gold merchandise at lower price points,” Zimnisky said. 

Two-tone jewelry combining two metals is already having a fashion moment. But jewelers are also using mixed metals of different value to make fine jewelry more affordable.

Moran says mixed-metal jewelry—like the combination of silver and 14-karat gold she says is popular lately—can offer “the weight and feel of precious metals without the sticker shock. But here’s where it gets more interesting: Brass is quietly replacing gold in a huge swath of trend-driven jewelry. And most consumers can’t tell the difference.”

Some Pure Gold Pieces May Be Harder for Consumers to ‘Justify’

Austin Willard, CEO of Faithful Platform Fine Jewelry in Lexington, Kentucky, in April bought Created Bracelets, which specializes in lower-priced sterling silver and gold-filled jewelry, as he sought to attract younger, more price-sensitive shoppers.

“I think it’s going to be harder for consumers to justify fine jewelry pieces in 14-karat or 18-karat gold, considering most of them aren’t used to paying such a premium for gold jewelry,” Willard said. “I expect our regular, middle-class clientele to opt for meaningful pieces in gold-filled or sterling silver, especially since mixing metals is such a big trend right now.”

Angara last month launched a collection of mixed metal items that combines gold with silver. Daga said he hopes it offers consumers eye-catching choices that run around $1,000.

“This is for a customer that wants a big look but for a reasonable price,” he said. But at that price point, he said, going with pure gold is a challenge–and the customer would likely notice.

“We’d have to use less gold, which would make the jewelry feel very light, like costume jewelry,” said Data.