Changing Metals Market Pricing

By David L. HuffmanMore from this author

Updated on September 29, 2026

As you may have noticed (I'd be astonished if you hadn't), prices for gold and silver, platinum too, are on the rise.

First, a word of advice: Don't panic, it doesn't mean we are going to have to price ourselves out of our markets. Now if only we can convince the customers, who are also privy to the knowledge of rising gold and silver prices, that jewelry is still a good buy.

Relative to the effective purchasing power of U.S. currency, precious metals are actually a fairly stable commodity, historically speaking. But the value of the dollar, typically relative to the price of oil since the U.S. left the gold standard, is in flux, as oil is increasingly traded in other currencies. What that means is that we can expect the price of gold and silver to continue to rise and stay high. What that also means is that, as a jewelry producer using these metals, your pricing structure must take into account the fact that you will be replacing inventory at increasing cost.

Is there a formula you can use for this?

Yes, but market forces will affect your decision. You may need to accept smaller margins to stay within price points that are competitive. However, your competition will undoubtedly be raising their prices too, so, whereas it is generally safe, in fact advisable, that you raise your prices with the increasing cost of materials, there may, in fact, exist an opportunity to increase your market share. It's all in the game of pricing and marketing.

First, with every article of jewelry you produce, it's useful to keep records of the costs of production, separated into cost of materials and value added costs. Materials, furthermore, might be broken down into metals and gemstones, as metals are the more volatile component of material costs. Value added costs should include all your overhead plus any profit. You need to know how much it costs to operate your business, including such things as wages, taxes, rent, utilities, insurance, and everything else you pay for to operate.

The idea that you can find a specific number to multiply material costs by to arrive at price is not a wise idea, although retailers typically price in this fashion. It is much more useful to know what it costs to run your business, and you should track this year by year and compare for changing costs. It is not unusual for it to take a couple years in business to acquire an accurate profile of your business costs.

But back to the issue of adjusting prices to protect your ability to produce replacement inventory and stay profitable. You may decide to adjust upwards your overall costs of operation as well as your material costs, since you will inevitably find that costs such as shipping and utilities tend to be rising nearly as fast as metal prices. Remember, the rising costs of metals is due to a number of factors, and some of those factors affect other areas of the economy. But you need to at least cover what you'll have to spend to acquire precious metals to continue to produce your work.

Gold used in casting, at 14 karat purity (remember, karat is a fraction of 24 karat purity as in 14 karat is 14 twenty-fourths gold, the other ten twenty-fourths other alloys). What's more, the market price of gold doesn't reflect what you pay for karat gold casting grain. There is a premium, relative to purity, going to the supplier who manufactures it. Typically, 14 karat gold's actual gold content (14 twenty-fourths), will cost you around 15% more for the gold content than the market price that gold is trading at, and should you contract out casting, it will cost you between 18-20% more for gold. Even if you acquired 24 karat and alloy your own karat gold, expect to pay in the neighborhood of 8-10% premium over the market price gold is trading at.

What about silver?

Most suppliers of silver stock provide charts to calculate their charges and accommodate rising silver prices. Likewise with gold, but most gold suppliers make this calculation a bit more difficult. In the case of findings, some suppliers provide prices based on a gold or silver market price at the time of the printing of their catalog, so it's a simple matter of dividing their price by that gold or silver price and then multiplying that number again by the current gold or silver market price.

Here's a typical cost breakdown for a hypothetical production ring made with 7 grams of 14-karat gold, 0.18 carats of small diamonds, and a calibrated 5 mm square princess-cut amethyst. The ring is cast from a reusable mold, so the cost of developing the model and mold is spread across the number of rings expected to be made.

Suppose the model and mold cost $1,000 and you expect to produce 100 rings. That adds $10 to the cost of each ring. Using a gold market price of $4,144.55 per troy ounce, the pure gold content in 7 grams of 14-karat gold is worth approximately $544.11. For this example, we'll add an illustrative 12% to allow for the cost of purchasing prepared alloy, bringing the estimated gold cost to $609.40.

Estimated cost per ring

• 14-karat gold: 7 grams, including the illustrative alloy purchasing allowance — $609.40
• Small diamonds: 0.18 carats at an illustrative $600 per carat — $108.00
• Casting, sprue removal, and shipping:$65.00
• Labor and allocated overhead: 2 hours at $90 per hour for finishing, assembly, setting, cleaning, and packaging — $180.00
• 5 mm princess-cut amethyst:$30.00
• Model and mold development: $1,000 spread across 100 rings — $10.00

Total estimated cost per ring: $1,002.40

This is a costing example, not a supplier quote. Gold prices can change between estimating and purchasing, while diamond, gemstone, casting, and labor costs depend on your specifications and suppliers. Update each line with current invoices or quotes before setting a wholesale or retail price.

At an estimated cost of $1,002.40 per ring, adding a 20% markup produces a wholesale price of $1,202.88. If a retailer then marks up that wholesale price by 150%, the retail price is $3,007.20.

That is a substantial price for this ring, so it is worth looking for efficiencies that preserve its quality. For example, suppose casting 25 rings at once reduces the casting charge by $8.10 per ring. The estimated cost falls to $994.30, the wholesale price to $1,193.16, and the retail price to $2,982.90—a reduction of $24.30 at retail.

You might also ask suppliers whether a planned quantity purchase would lower the cost of the diamonds. Balance any savings against the money tied up in inventory. Reducing the time spent on avoidable rework may help, too, but cutting skilled bench time simply to reach a target price could compromise the finished piece. Likewise, a retailer should understand how a smaller markup would affect the costs of selling the ring before lowering it.

How changing material costs affect the price

The example becomes more useful when we compare it with an earlier quote. Suppose this ring was last priced using an illustrative gold market price of $4,000 per troy ounce and a diamond cost of $500 per carat. With the same 12% allowance for purchasing prepared alloy, its estimated gold cost would have been $588.14. The 0.18 carats of diamonds would have cost $90.00.

Using the updated example's gold market price of $4,144.55 per troy ounce and an illustrative diamond cost of $600 per carat, those costs become $609.40 for gold and $108.00 for diamonds. That is an increase of $21.26 for gold and $18.00 for diamonds, or $39.26 per ring. We are holding the other estimated costs constant to show the effect of those two changes alone.

The ring's total estimated cost rises from $963.14 to $1,002.40. Applying the same markups raises the wholesale price from $1,155.77 to $1,202.88 and the retail price from $2,889.42 to $3,007.20. That is a retail increase of $117.78, or about 4.1%.

In practice, casting, labor, shipping, and other costs may change as well. Check current quotes for each part of the job before deciding how much to adjust the selling price.

Here's a brighter note:

If gold were the only cost to change in our ring example, the increase would be more modest. At the earlier illustrative market price of $4,000 per troy ounce, the ring's estimated gold cost was $588.14. At $4,144.55 per troy ounce, it is $609.40—an increase of $21.26 per ring.

Keeping every other cost in the updated example the same, the total estimated cost rises from $981.14 to $1,002.40. Applying the same 20% wholesale markup and 150% retailer markup brings the retail price from $2,943.42 to $3,007.20. That is an increase of $63.78, or about 2.2%.

A seller might consider a retail price of $2,995 instead. That smaller increase could suit the piece and its market, but the difference must come from somewhere: a lower retail markup, a production saving, or another cost reduction. Check that the revised price still supports the business before settling on it.

Customers may choose a piece of jewelry for reasons beyond its metal content, including its design, craftsmanship, and personal meaning. Explaining those qualities helps them understand its value. At the same time, a maker needs to know what the piece costs to produce and replace. Reviewing the numbers as prices change allows you to make deliberate adjustments without reacting to every movement in the metals market.