My thoughts on the prices of gold

We have all heard that the price of gold has reached an all time high in 2011 and there is talk that it could climb even higher in 2012. This price increase has had an adverse effect on the jewelry trade as a whole. This adverse effect translates into soft sales and price resistance. The perception of an inflated retail price has the potential jewelry customer running for the hills when they have to buy a gift made from gold.
The truth of the matter is that although the price of gold has gone up per ounce the relative cost of a piece of fine jewelry has only had a very slight increase. The reason for this is because although the price of gold is expensive if purchased by the ounce, we only buy a piece of jewelry that weighs a fraction of an ounce. Jewelry weight is measured in units of grams, therefore the cost increase may only translate into $100.00 or so overall. Another reason that the fine jewelry prices have not shown a significant increase is that the quality of workmanship is cheaper because of technology. Computers have taken over and replaced certain stages of jewelry making that would have been done by a bench jeweler in the past. This has resulted in better more exacting and consistent workmanship at a fraction of the cost to pay an individual to do the same job.