AT what spot prices does Jewelry break down..

mumu

I'm not sure what the right way to present this question is so i will try the long way. My thoughts are that at some point the cost of a metal makes Jewelry premiums unreasonable. To make an example, I used to work at Tiffany's, over 10 years ago. Silver was 6$ an ounce or whatever it was. When silver went to 7, they used it, I imagine, as an excuse to raise prices, while citing the increase in silver cost. But take the very popullar heart tag bracelets. They were like 100$ when I started working there and went to 125$ on the silver hike. The bracelets were ~40 grams of .925 so lets call it an ounce of pure silver. Now I dont know what the prices are now with silver at $18 but obviouly if they never moved it at from 100$, a 10$ increase only SHOULD hit 10$ to their bottom line. But if silver went to 100$/ounce then you couldnt sell those.

This example is extreme and probably unclear but is there any theorized price where the prices of silver and gold would likely halt jewelry production in favor of purely selling bullion over jewelry. Not because the luxury of having it becomes cost prohibitive but because bullion itself becomes favored in the heat of the frenzy. I think buying gold as jewelry NOW is stupid with oiinflated premiums but obivously its not come to a halt.

mumu

I would pose the same question for coins such as common date morgans for example though with grades it becomes more complex. morgans that are 50$ now would probably be sold as melt with silver at 100$ in much the same way that common gold eagles are sold as melt with gold here. Maybe that helps clarify the question.

RedTiger

In America, jewelry is usually sold for huge premiums over the melt value. 100%, 200% even 400% is not uncommon, so as the spot price goes up, it is only one component. For luxury brands, advertising and marketing likely are a larger cost than the metal.

In other countries, such as India and some Middle Eastern countries, jewelry usually is sold for smallish premiums over melt value, so large changes in spot price will have a direct impact on jewelry demand.

If the price really got way high, some makers would resort to lower purity, or silver-plated gold, or other tricks to limit costs.