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Essential Precious Metal Information For Jewelry Shoppers

Jacqueline Hull

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How does the skyrocketing price of precious metals affect jewelry prices?

Summer is the busiest jewelry season for wedding and anniversary jewelry, and some shoppers may be surprised by sticker shock. Precious metals of gold and platinum are at all time highs, both up nearly 70% over the last 5 years; when the price of raw materials rises, so in turn does the price of goods. Precious metals have risen along with all commodities, including oil which we can relate to and feel in our pocket book each time we fill the tank.

With jewelry it is harder to conceptualize what this means, what is the real impact on fine jewelry prices? It's all about the purity and weight. The most important fact a shopper needs to know when it comes to jewelry, pricing, and precious metals, is it is all about the purity and the weight. For the jewelry shopper this basic concept is easy to understand, but hard to apply when trying to compare prices. The Internet presents us with so many choices, which is great for the shopper looking for the best deal. The downside of so many choices is the inevitable; they are not all created equal, compelling smart shoppers to get educated. So what do you need to know? First, let's begin with some important facts about the two key fine jewelry precious metals. Gold Jewelry

  1. Gold is measured in units of 24. 24 karat gold is pure gold. How much alloy is mixed with the gold determines its karat weight, and therefore how much you pay. 14 karat gold is 14 parts gold to 10 parts alloy 14 + 10 = 24). 18 karat gold is 18 parts gold to 6 parts alloy (18 + 6 = 24), and so on up the scale until you reach pure gold at 24 karat.
  2. Yellow Gold is alloyed with silver, while White Gold is alloyed with nickel.
  3. Other Typical alloying metals mixed with gold and their color visual effects are:

  • 24 karat Gold has a stunning visual Gold effect of course
  • Mixing Gold with Copper causes a visual Reddening effect
  • Mixing Gold with Silver causes a visual Greening effect
  • Mixing Gold with Zinc causes a visual Bleaching effect of the gold
  • Mixing Gold with Nickel causes a visual Whitening effect
  • Mixing Gold with Palladium causes a visual Whitening effect.

Platinum Jewelry

  1. Platinum is measured in terms of percentages, 90 and 95 percent being the most common for jewelry. A platinum stamp of PT950 would be 95/1000 parts platinum. The other 5% being an alloy.
  2. Platinum is commonly alloyed with another metal such as iridium or ruthenium.
  3. Platinum is a much denser metal than gold and is the largest percentage content wise in the piece of jewelry. Therefore jewelry made of platinum is considerably heavier and stronger than its counterpart in gold. Thus more expensive.

Understanding Market Prices

Even though the everyday jewelry shopper may not concern himself with market prices of raw precious metals, understanding how to read and translate the numbers is a good foundation for understanding price variations. On the open market metals are normally traded in ounces, therefore the jewelry shopper needs to know how to convert from ounces (OZ) or the less common penny weights (DWT), to grams, how jewelry weight is generally quoted. The formulas are simple and will come in handy if you need to compare prices. This is especially useful when shopping for wedding bands or other jewelry that has high metal content. Basically, without considering the complexity of alloys and percentages, you can take the market metal trading rate, frequently referred to as “spot", and convert it to jewelry measurements to calculate the basic raw material cost.

The basic formulas:

  1. Ounce to grams: oz. * 31.1
  2. Ounce to penny weight: oz * 20
  3. Penny weight to grams: DWT * 1.555
  4. Penny weight to ounce: DWT / 20
  5. Grams to ounce: gram / 31.1
  6. Gram to penny weight: gram / 1.555

To calculate the raw metal cost (without accounting for alloys), take the market rate quoted in ounces and convert to the weight measurement you are trying to calculate, then multiply by the stated weight

Example: The current market rate for platinum is $2,000 per ounce. The ring you are interested in is stated to weigh approximately 6 grams in 95% pure platinum. Convert the ounce quote to a price per gram: $2,000 divided by 31.1 = $64.31 is the estimated price per gram. The ring weighs 6 grams in 95% pure platinum. Multiply $64.31 by .95, then by 6. The raw platinum cost at the current market rate is $366.57.

Alternatively you can convert the known gram weight to equivalent ounces, 6 divided by 31.1 = .193. Then multiply .193 by the market rate, $2,000 = $386. $386 at 95 % equals $366.

Bear in mind this is just the raw platinum cost to your jeweler. Double the raw cost as a starting place for a fair price. To give you an idea how rising precious metal prices are affecting jewelry prices all over the world, consider that same ring at 6 grams, with a $850 spot platinum price in 2004, would have cost $164.

The good news is this is a great time for refining old jewelry with high metal content. Depending on when you bought it, you have probably made at least 50% on your investment. If you are a current jewelry shopper, like any other purchase, get educated and buy from trusted sources. Precious metal prices are not likely to come down in the near future, and quality is always a good investment.

*Note: To find current market rates on metal visit

About the Author

Jacqueline Hull is the President and CEO of Diamond Design Co (DDC), a high end jewelry company located in San Francisco. Ms. Hull has been working with jewelers and clients since early 2000 and has written numerous diamond education pieces for Beyond the 4Cs and Diamond Design Co. DDC designs and manufacturers custom engagement, wedding and anniversary rings for high end clientèle in the Bay Area.


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