A gold necklace priced in an American mall store costs considerably more than the gold inside it. The gap is not one markup but a chain of them, each attached to a real cost.
Fabrication happens before the store sees it
Raw gold must be alloyed to a working karat, drawn, cast or stamped into components, assembled, soldered, polished and finished. Each step consumes labor and equipment time.
Metal is lost at several of those steps as filings and sweeps, which are recovered and refined but not without cost.
By the time a piece reaches a wholesaler it already carries a manufacturing cost that has nothing to do with the day's metal quote.
Inventory is expensive to hold
A jewelry store must display a broad range of sizes and styles so customers can find something, and most of that stock will sit for months.
That inventory is financed, insured and secured, and the carrying cost accrues against every piece in the case whether or not it sells.
Slow-moving designs eventually get marked down or returned to the melt, and the pricing of everything else has to absorb that outcome.
Retail overhead is concentrated in few sales
Mall rent, staffing, security, point-of-sale systems and store fit-out are largely fixed. A jewelry store completes relatively few transactions per day compared with most retail.
Each sale therefore carries a large share of the store's fixed cost, which raises the markup required to break even.
This is why identical pieces cost markedly less through online sellers with warehouse operations rather than showroom floors.
Branding and design carry their own value
Named designers and recognized house styles command prices unrelated to metal content, because the buyer is purchasing the design and the association with it.
That component is genuine to the buyer and irrelevant to a refiner, which is why branded pieces rarely recover their premium on resale by weight.
Understanding which part of a price is metal and which part is everything else explains most of the surprise people feel when selling later.
Repair and service are part of the model
Sizing, prong retipping, chain repair and cleaning are performed by stores with a bench jeweler, and those services are often priced below their true cost.
The margin on merchandise supports that capability, which in turn brings customers back into the store.
A store's pricing therefore reflects the whole service relationship rather than a single transaction, which is a difference worth knowing before comparing it against a pure metal price.