Gold prices surge, recovery limited—how should consumers invest rationally?

Recently, international silver prices have been rising steadily, leading to a surge in investment demand. However, the silver jewelry resale market has noticeably cooled down. Many gold and jewelry store chains have stopped accepting silver for recycling, and the few businesses that do accept it offer buyback prices that are less than 30% of the retail price. Unofficial resale channels often involve lowball offers and unjustified weight deductions… Why are major brands unwilling to buy back silver jewelry? How can consumers avoid risks?

A reporter from China Central Television visited several gold and jewelry store chains in Beijing, where they neither sell silver jewelry nor conduct buyback services.

It is understood that the raw materials for silver products come partly from mining and partly from refining scrap silver. Mr. Chen, who is engaged in precious metal recycling, told reporters that recently, silver prices have continued to rise, and market investment demand has increased rapidly, leading to a sharp growth in orders from manufacturers.

Silver is popular, but there are many restrictions in the recycling process. Su Yunfei, a certified jewelry designer recognized by the China Jewelry & Jade Jewelry Industry Association (GAC) and an expert in national professional standards question banks, told China Voice that from a cost perspective, major brands find it unprofitable to conduct silver jewelry buybacks.

Su Yunfei: Major brands usually stockpile silver by the ton, so it’s very complicated for them to buy back small amounts like 2 grams, 5 grams, 10 grams, 20 grams, or 100 grams. The personnel costs for big brands entering shopping malls are high, and opening up buyback services would involve more labor costs, which is not suitable. Even if some brands accept such buybacks, it’s mainly to promote more consumption.

Mr. Li, head of a precious metals recycling organization, explained from the perspective of a recycler: Although silver is a precious metal, its investment attributes are far lower than gold, and the cost of refining silver is relatively higher.

Mr. Li: All the bracelets, rings, necklaces, and crafts on the market need to be sent back to factories for secondary processing. During processing, oxidation occurs, and about 15 grams can be lost per 1,000 grams of silver, making the costs higher. Also, the difficulty of processing gold and silver is similar, but for gold priced at over 1,000 yuan per gram, a labor fee of 10 yuan isn’t high. However, for silver at around 20 yuan per gram, a 10-yuan labor fee is already significant.

Using silver jewelry as an example, the buyback price is based solely on the raw silver material. Additional costs such as labor and design fees incurred at purchase are not included in the buyback price.

Mr. Li: During buyback, labor costs cannot be included. Merchants don’t want customers to lose too much, so they are reluctant to accept silver. Silver is more suitable for wearing, decoration, or as a keepsake. It’s not recommended to treat silver the same as gold for short-term profit investments.

Silver jewelry mainly comes in 925 silver and 999 silver, which differ significantly in purity, hardness, luster, and applicable scenarios. Mr. Li reminds consumers to carefully distinguish when buying back silver jewelry, as many scams focus on lowballing, weight deductions, and misreporting material quality.

Mr. Li: For example, some shops quote a buyback price far above market value to attract customers. Once they get the jewelry, they find various excuses to lower the price, claiming “severe oxidation,” “outdated style with no resale value,” or “925 silver is not pure silver and not worth much.” Many people, finding it troublesome, end up losing out. Some stores also exploit the fact that ordinary consumers cannot tell the difference between 925 silver and 999 silver, deliberately pricing 999 pure silver as 925 silver.

Su Yunfei explained that most silver jewelry sold in malls contains 92.5% silver, known as 925 silver. Although other metals are added, this does not justify arbitrary lowballing during buyback.

Su Yunfei: 925 silver contains 7.5% other alloys. Without professional testing like fire assay, these alloys can oxidize and turn black. Many recyclers use this as an excuse to lower the price.

Su Yunfei suggested that it is generally difficult to complete silver jewelry buybacks at mall-based gold and jewelry stores. Consumers are advised to go to reputable precious metal recycling agencies or pawnshops.

Su Yunfei: For precious metal buybacks, each city has a jewelry processing hub with professional recycling shops. Investors interested in buying silver bars or recycling jewelry should carefully choose their trading points, avoid following trends blindly, and first familiarize themselves with the market before making moves.