Jewelry price inflation continues to rise at a double digit pace. The combination of making gold easily tradable on the stock exchange and then the economy panic has caused the price of gold to sky rocket over the past few years. Gold continues to set new highs. Most recently gold has gone over $1,400.00 an ounce. This is odd because gold traditionally rose at about a rate of 2% on average over periods of ten years. Gold stayed at $300.00 for close to ten years then went to $600.00 for many years. Some jewelry manufacturers actually lease their gold because of the uncertainly of gold prices. Jewelry manufacturers sell at the days gold market price. This causes tight margins for jewelry stores that do not continue to raise their prices at the same rate.
“For the past year, jewelry suppliers’ prices have been rising steadily and sharply, but jewelry prices at the retail level have generally shown little inflation. This has caused a margin squeeze, particularly among retailers. In August and September, retail jewelry prices finally begun to reflect the higher-cost goods that retailers are receiving from suppliers. However, in October, retail price inflation moderated significantly, as jewelers did not pass along higher wholesale prices to their customers. In November, retail jewelry prices rose by the second largest monthly gain this year.”