Gold is indeed a unique commodity. Unlike other commodities, which produced to be consumed, such as oils or natural gases, gold is mainly produced for collecting purpose. This is the reason why gold hold special position from other commodities.
Gold that gets around in the general populous of the world today are mostly derived from change ownership from one person to another or from a financial institution to a person. It is rarely from recent mining activities, because the stock of gold on Earth is very rare now. From mining operation and activities, the total stock of gold in the world only increased by 1.7 percent per year.
The amount of gold that has been processed until today is only around 155 thousand tons. If everything is melted, then it would only cover about eight thousand cubic meter, or filling three-quarters of an Olympic standard swimming pool. This is very small indeed, considering gold mining has been done for thousands of years.
In short, the supply of gold will never increase significantly, because the emergence of new gold mines is too small in numbers. This is why current gold price fully reflects the demand, not supply anymore. With this rarity, no wonder gold is considered as precious metal and used for creation of jewelries.
Gold jewelries are usually created by mixing gold with other metals. This is because pure gold is very soft and difficult to form. Metals commonly used for mixed materials are nickel, copper, silver, zinc, rhodium and others. In example, jewelry with gold content of 80 percent means that the gold content in the jewelry is only 80 percent, while other 20 percent are a mixture of metal.
With the mixture of metal involve, prices of gold jewelry might not congruent with the world price index of pure gold. This means that while buying gold in the form of bars or coins can refer to world price index, the same case can’t be applied in buying gold jewelries. When the price of gold goes up in market, it doesn’t mean that price of gold jewelries will also follows. Prices of jewelries are mainly set by shops that sell them.
Each store has a different pricing policy. Gold shops with branded famous jewelries will market their jewelries at a high price, because of the quality of the gold, quality workmanship and its big name brands. Newer model of jewelries that are sold are usually pitched with higher prices than the old ones. This is because jewelry also a form of accessory and follows trends.
The same rules also applied when selling gold jewelries. The price offered by buyers might not in accordance to gold prices in the market generally. There are a lot of factors considered by a buyer before accepting gold jewelries. This is why it’s important that you find buyer that are willing to pay top price for your gold jewelries.