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Gold Prices, Mining & What it Means for the Consumer

If you’re not in the jewelry or finance sector, you probably haven’t kept up with the trending news about Gold. The price of gold has hit a new all time record of $2,067/ounce (as of August 2020). The previous record is $1,923/ounce and dates back to 2011. Gold prices have been making news since the onset of COVID-19, with the prediction that we see prices hitting $2,000 by the end of the year.

Generally, when the economy goes down, gold prices rise. When investors see a downturn in their other investments they purchase gold since it is tangible and has a limited supply. What does this mean for you? As the cost of gold rises, so does the cost of jewelry. For example, our traditional solitaire engagement ring has an average of 3.0 grams of gold, depending on the size. You can see how the cost of a ring can quickly increase as the gold prices rise.

Another thing about gold that you may not know is that the mining process can cause as much conflict as diamonds, if not more. Unfortunately, gold has a long history of violence and environmental damage. This is becoming an even bigger issue as prices rise and smugglers are hurrying to capitalize on the current economic situation. One of the biggest violators is the Democratic Republic of the Congo (DRC). Last fall, the U.S. and many other nations banned gold imported from the DRC because it is “produced, in whole or in part, using forced labor.” The UN reported that more than one ton of gold was smuggled out of the DRC in 2019. To put that into perspective, if we say the average ring has 3.0 grams of gold, then more than 302,000 rings produced last year contain smuggled gold.

Gold from the Congo is primarily mined by artisanal and small scale miners, which are not well regulated. In October 2019, an illegal mine collapse killed 22 people. Among the injured were children and pregnant women. Aside from safety and unfair labor practices, minors also lack environmental regulation. The bottom line is that gold mining is incredibly destructive. Mercury and Cyanide is used to extract the gold, which then seeps into the ground and surface water. In addition, it’s estimated that 180 million tons of toxic waste are dumped into waterways every year.

How Can You Make a Difference?

The best way to ensure your jewelry is completely ethical is to only purchase 100% recycled metals. Many jewelry companies say they use recycled metals, but only a small percent of the metal is from a recycled source and it is mixed with newly mined metals. As a consumer, make sure you ask the jeweler what percent of the metal is recycled and how they certify their metals are conflict-free. At Origin Diamonds, we source eco-friendly, recycled metals specifically for fine jewelry that have been melted down. Unlike common scrap recycling, which can come from post-consumer products like technology, scrap waste metals and other sources, this kind of recycling is sourced specifically from metals that can be reused to make the highest quality jewelry.

From rising gold prices, to banned imports, it’s important to make sure the metal in your jewelry is as affordable and ethical as your diamonds and gemstones. By asking questions and being aware of the industry, you can have beautiful jewelry that you are proud to wear.

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