Rising Gold Prices

Wow! The price of gold is continuing to break records with gold breaking through the $980 an ounce. Why? is it because of the demand for gold jewellery? Hardly, jewellery accounts for only a very small portion of gold demand. Gold is usually bought by investors looking for a safe haven for their money. With the financial markets going through some huge volatility in the last 3 years, banks, instituitions and funds have been buying gold to reduce their risks.

Just have a look at the chart below to see this visually:


So what does this mean to the average diamond fanatic? Well, for a start, most diamonds are set in Gold or Platinum (Platinum prices have gone crazy too) which means that the price for jewellery will be more expensive. However, the value in most diamond jewellery pieces, especially diamond rings, is mostly in the diamonds, so prices have not risen to put jewellery out of bounds.

What has happened is that people have been buying less plain gold jewellery and upgraded to diamond jewellery, so fewer number of pieces but of higher quality.

This is also a good time to go through your unworn jewellery and take them to a local jeweller to be scrapped! For instance, a 20 gram plain 9ct gold bracelet was worth £53 in 2003, is now worth around £120 in scrap terms!