The rising price of gold may be good for those of you who have invested in it, but for consumers who are thinking about buying gold jewelry for a gift this year, the situation is not so good.
In response to gold prices reaching record highs, prices for gold jewelry have surged, with 10 grams of 999-carat gold reaching an all-time high. The same with 9-carat gold jewelry.
Rolex has just raised its prices for a second time in 2024. So has Tiffany & Co., Bulgari, and Van Cleef & Arpels. If there’s a trickle-down, consumers who shop mall jewelry stores like Kay, Shane Co., or Zales might also see a price bump before too long.
That trend is expected to continue. Reports indicate that the revenue growth of 15 large jewelers, which account for 75% of the organized market, is expected to moderate due to high gold prices.
“The cost of gold has surged in 2024, with prices reaching a record high in May, having a direct impact on the price of gold goods like jewelry,” Rick Kanda, managing director at The Gold Bullion, told ConsumerAffairs. “With elevated raw material costs, some companies have increased the retail price of their gold products to make up for these unprecedented prices.
Kanda put himself in your — the consumer’s — shoes and theorizes that this price-sensitive market may lead to concerns about whether retail prices will continue to rise and become less accessible to them.
“While the raw material cost of gold has steadied around £1,900 per ounce in recent weeks, this is still an extremely high number. Keeping an eye on the market is a good idea for anyone looking to invest in purchasing gold items. If gold prices decrease, the cost of a consumer good may follow this trend.”
And, here come the gold scammers to cash in
Kanda said that scammers have already started to pounce on this shift.
“They look for the best opportunity to scheme people out of money, and seeing the prices of Rolex rise may be attractive to them,” he said. “With the promise of lower prices, scammers may attract buyers with fake products. It is vital to only buy from reputable companies when making any type of gold purchase and know the signs of fake gold.”
When asked how consumers can spot fake gold in their jewelry, he said there are four tried and true methods:
Keep an eye out for discoloration
Most consumers aren’t metallurgists or scientists and might not know that gold does not tarnish, oxidize or rust as it is a precious metal, but silver or copper will. This means that over time, fake gold can lose its luster, become discolored, develop a green or blackish tinge due to oxidation or corrosion or become more dull or brassy in its appearance.
“If you spot discoloration on your item, it is an almost certain sign that it is not pure gold and is instead gold-plated,” Kanda noted.
Evaluate the color
Depending on the material used, fake gold can have various colors. Materials like brass, copper, aluminum and other alloys are often coated with a layer of gold-coloured paint to mimic the appearance of real gold. However, real gold has a warm, yellowish hue that is difficult to replicate with fake gold typically lacking the distinctive coloring of real gold.
Magnet Test
Another test is seeing if a magnet will connect with the gold because real gold is not magnetic. Kanda’s suggested method is to place the magnet close to the item and place it on a surface. If the item in question is attracted to the strong magnet, it is likely not pure gold and means that there are traces of other metals in the item.
Look at the price
“If the price seems too good to be true, it probably is,” Kanda says. “Gold has a set spot price, meaning low prices could be a sign of a scam. Compare the cost of the item you are buying to the set price to get an estimate of how much an item should cost. If someone is selling gold below this cost, it is best to avoid making the purchase.”