Rising Gold Prices Force Small Jewelry Designers to Find Alternatives

NEW YORK —  Rising gold prices have had a sizeable impact on the profitability of gold jewelry forcing many jewelry designers to search for new, lesser quality materials.

            Page Sargisson, a small jewelry designer based in New York, designs and sells 10KT gold jewelry ranging in size from a large three inch medallion to mini dime-size charms. 

Since beginning her business five years ago, Sargisson said she has been forced to slowly raise her wholesale prices to ensure some amount of profit on her pieces, a method she cannot continue forever because the rising cost of gold is showing no sign of slowing. 

Gold prices more than doubled in the five years since Sargisson started her business.  According to Kitco, one of the world’s premier retailers of precious metals, gold prices went from less than $400 an ounce in October 2003 to $850 an ounce in October 2008.  Gold prices have increased more than $100 in the past year alone.

            To keep her small business running without continuing to raise her wholesale prices, Sargisson said she came up with a new line that mixed gold with the less expensive sterling silver metal.  In doing so, she could still include the precious 10KT gold, but to a lesser amount per piece.

However, if Sargisson continues to use the precious metal her domestic market will continue to dwindle.  She explained the majority of her sales are to small boutiques across the United States.  After purchasing the jewelry at wholesale, the boutiques must significantly mark up the prices to a high retail cost, which consumers are not so quick to purchase, particularly when the economy is in a slump.

             Anna Bennett, a former employee at Seattle’s sister stores, Bliss and Dream, said the stores have not bought new gold jewelry all summer because the pieces just were not selling.  The stores have instead turned to lesser quality jewelry, made from less expensive metals such as silver and vermeil because the lower prices proved more profitable.

            “You can only mark up gold so much, you can mark up other, cheaper metals much more,” Bennett said.

As a result Sargisson has actively pursed foreign markets where her high dollar prices are less expensive in the foreign currency.  She estimated roughly 40 percent of her sales were international, a percentage which she is only looking to increase. 

Just last month, Sargisson showed her jewelry at a new designers fair in Paris with the hopes of finding new foreign buyers within new international markets.

Despite her efforts to maintain the quality of her jewelry, Sargisson may eventually be forced to revert to lesser valued products such as vermeil, gold plated silver.  “I may do a vermeil line, which I never planned on doing, but I am losing customers as I raise my prices,” said Sargisson, “I need to do what I can to stay in business.”