Metal Prices 2011

In case you haven’t been following them or have not heard, metal prices were everywhere from highs to lows in the past year. For the purposes of this write-up, I’m going to focus on gold and silver because they are the most common jewelry metals.

If you are ever interested in seeing where metal prices are, please check out Kitco. They are considered an industry standard for metal prices.

Currently, gold is sitting around $1566/ounce and silver is around $28/ounce. While this might seem high, it has jewelry designers like myself rejoicing. Gold hit an ultimate high of nearly $1900/ounce this past fall with silver around $43/ounce. The funny thing is, we are getting excited about how low the current prices are, but they are not near where they were almost a year ago. In January/February 2011, gold hit a low of almost $1300/ounce and silver was around $27/ounce. Well, I shouldn’t say they aren’t near where they were a year ago, because silver is close, but look at the difference in the gold number.

Recently, I was reading an interesting article about this. I wish I could remember where it was so I can give it credit, but I can’t remember nor find it right now. The article pointed out how over the past few years, silver has been growing in popularity for jewelry. It can be made into classic designs, but it also works very well for bold modern designs, which are quite popular right now. One of the other reasons for silver’s increase in popularity is the price difference between silver and gold. Silver is significantly cheaper (as you can see above); however, it is still durable and easily formed into jewelry pieces (malleable). More and more people are going to silver jewelry because they want the quality, but they do not want the price of gold. The article went on to say that this demand has pushed the price of silver up at a greater rate than gold (you have to look at percentage increases rather than actual price increases to get a fair comparison between the two).

I find this interesting because if you look at the numbers currently, that isn’t the way it is. There is a 4% difference in the silver prices between what was the lowest price of the year and the current low price; and there is a 17% difference in the lowest gold prices. The difference between the highest and lowest gold prices was 32% with the difference between the highest and lowest silver prices being 37%. Not being an economist by any stretch of the imagination, this has me really curious. I’m wondering if silver prices went up by a greater ratio, did they also fall by a greater ratio, putting them at lower prices currently? I hope I’m looking at this the right way and that it makes sense.

As I write blogs, I like to be informative and come to a conclusion; however, I am going to leave this blog open ended. I plan on doing a little more research on this, but I am also putting this out with hopes that someone can explain it to me better. At the risk of sounding selfish, I’m more concerned about how low silver can go, but it does intrique me as to why silver and gold do not increase and decrease at the same rate. I’d love to hear from someone who has a good background in this topic!