How Precious Metal Markets Impact The Price Of Handmade Jewelry
Did you know that there is an entire market fluctuating each moment, deciding the value of the raw material that makes up your sterling silver jewelry?
Silver is considered a precious metal, meaning it is a metal that has high economic value due to its rarity. Precious metal coins were historically traded as a form of currency dating back to 600 BCE in Lydia (modern day Turkey). Though not considered a primary form of currency and metals still hold value as an asset for investors today.
The precious metals market is a worldwide market operating essentially 24 hours a day, and weight of metals is measured in troy ounces (1 troy oz = roughly 31 grams).
In March 2020, the COVID-19 pandemic made waves, and with so much supply chain and market uncertainty, the price of silver plummeted, reaching a seven-year low moment of $11.94/troy ounce. This low-priced luxury (for silversmiths especially!) did not last long, as the purchase of silver soared since this precious metal was considered a safe investment during uncertain times. In the fourth quarter, the average price was $24.89/troy ounce. This example goes to show that the precious metals market is prone to fluctuations and can be easily affected by periods of financial uncertainty, but also by general inflation or political events.
As a silversmith, and a tiny business owner, the fluctuating prices of the silver market give me a shiver sometimes! In addition to the raw material market price of silver, handmade jewelry has other associated costs, like uniqueness, time and labor, as well as studio resources (& not to mention good intention!).
Moral of the story: Though the precious metals market (& associated jargon) is something I do not fully understand, it is worthwhile to keep in mind that the precious metals market is one contributing factor to the price tag on your handmade jewelry. It also worth knowing to sell your silver scraps when the market price is high, and buy when the market price is low!
Interested in checking out the current precious metals market trends? Visit Kitco here.