The sell gold for cash methods have been taking a toll on the new jewelry market because people would rather sell gold and receive cash then purchase jewelry with their hard earned money mostly due to the economy and higher prices of everything.

High-priced gold is here to stay and jewelry manufacturers, retailers and consumers are coping in various ways, despite the recession.

The World Gold Council USA  (WGC) put out a statement that said that the reality is people are now dealing with a much higher-priced gold market, and so low-priced entry-level gold jewelry – like $30 earrings or a $40 chain – is gone for the foreseeable future.

According to the WGC, the desire for gold jewelry is not going away.  A 2008 WGC survey of U.S. consumers found they preferred higher karat gold – 14k and 18k – even when the prices rose significantly.  People want the best gold jewelry they can buy and will either wait or go to a Philadelphia pawn shop to purchase it at a better price then the fancy retail stores.

Gold manufacturers are having a tough time right now with gold high prices, lack of credit from banks, the economy and the downward demand is putting a lot of pressure on gold producers.  Add to the equation the hundreds of cash for gold companies and pawn shops, and gold manufacturers are weathering a perfect storm.

Some gold manufacturers are coping by introducing sterling silver as the new gold or combining more sterling silver with gold to reduce their margins instead of raising their prices.  They also reduce inventory and carry costs to improve supply chain efficiency; managing business and expenses more carefully; and seek new revenue opportunities like line extensions.

Jewelry retailers are having the toughest time of all even after reducing prices for the holiday season; they simply decrease their purchases and keep less stock on hand which means less of a selection for shoppers.

Even though there are new designs and gold is still fashionable, small retail outlet remain cautious and more selective leaning toward lighter pieces and prices that resemble higher-end items.