Last month, on the opening day of New York’s annual Winter Show, anxious whispers flew between jewelry collectors and sellers alike. The once unthinkable had nearly come to pass: gold was approaching $5,000 per ounce.
In recent years, the precious metal has become steadily more precious. After starting the decade at roughly $1,500 an ounce, its price has surged, nearly doubling in the past year alone. And as gold’s ascent shows no sign of slowing, the jewelry industry—the largest consumer of gold—is feeling the strain.
While larger jewelry houses such as Cartier and Tiffany have the benefit of economies of scale, smaller brands are scrambling to keep up—and keep their customers placated. Clients of independent jewelers, such as New York’s Marla Aaron and Brooklyn-based Fewer Finer, have recently received e-mails explaining the need for price hikes. For many jewelers, this is the second or third increase in the past 12 months.
“It’s really important to us to stay as close to the current gold rate as possible,” says Madison Snider Podpirka, founder of Fewer Finer, explaining why the company opts for frequent, smaller price hikes, rather than a single increase. Podpirka says her clients appreciate the transparency—and the week’s notice to buy before the price increase takes effect. “It’s almost like a sale,” she says.
“A lot of our clients’ prices are up 50 to 60 percent year over year,” says David Hakimian, founder of DEH Jewelry Solutions, a consulting firm for independent designers. “It’s just a new world.”
The surge has been driven less by consumer demand than by global uncertainty—much of it caused by the Trump presidency—with gold becoming a hedge against the declining value of the dollar or other volatile financial assets. That sense of protection, however, is not felt by jewelry buyers.
“It’s just a new world.”
While those with larger budgets—above $20,000—can still find plenty of options, those commissioning custom pieces on smaller budgets are finding that the pickings are slim. “$1,000 to $3,000 retail is becoming really difficult to design into in gold,” says Hakimian. “Silver and other materials are still very much within that price point, but, in gold, it’s pushing that customer out.”
The jewelry collector and influencer known as @okay______fine agrees. “I go through my lists, and nothing is under $500 anymore unless it’s really, really thin and dainty.” Though she prefers heavier gold pieces, she predicts a swing back to smaller, lightweight, or low-karat designs because of the cost.
Others are turning to alternatives. Marla Aaron launched her eponymous brand in 2012, casting her signature carabiner lock in silver and brass. She’s now expanding into pieces made of unusual materials, including porcelain, Fordite (hardened, layered auto paint), and rubber. “When the materials get expensive, the thinking has to get even better.”
Making jewelry in alternative materials and weights is nothing new. In the early 19th century, Prussian rulers encouraged the aristocracy to donate their precious metals and gemstones to help fund their wars and, in return, receive iron jewelry—now known as the highly collectable Berlin Ironwork Jewelry—for their loyalty. And Victorians were fond of creating jewelry from almost any material they could get their hands on, including cut steel, 9- and 10-karat gold, gutta-percha (a dark, rubbery substance derived from tropical trees), and human hair.
“When the materials get expensive, the thinking has to get even better.”
Still, some designers are doubling down on gold. Jean Prounis, founder of Prounis Jewelry, sculpts her pieces in 22-karat gold and, despite introducing silk cords for pendants last year, has no plans to move away from the metal. “There’ll always be a need and a desire to wear it,” she says.
With prices swinging wildly in just the last week (from $5,626 an ounce on January 29 to $4,423 on February 2 and back to $4,891 on February 5), gold’s value feels increasingly unstable. J.P. Morgan projects the metal could reach $6,300 by the year’s end. For the moment, as jewelers remain transfixed by the futures charts and brace for the next spike, some joke that it may finally be time to replace diamonds—whose prices have plunged—with gold nuggets in order to create an engagement ring of true value.
Gracie Wiener is the Social-Media Manager at Air Mail