Silver is worth currently only about $30US an ounce (but prices do fluctuate, so when you read this blog check the current price), and an ounce is quite a lot of silver, about 10 average rings, more or less. Most of the cost therefore, when you buy silver jewellery is in workmanship and mark-up.
Pure silver is incredibly soft and would be quite useless as jewellery, other than for plating, so it is always alloyed with other metals. Even at 95% purity it is far too malleable, so the usual silver on the market is sterling silver, which is 92.5% silver, and (usually) 7.5% copper and it is often marked .925. Other alloys exist, however, and change the colour slightly. Other purities also exist such as .900 silver, and in Britain it is possible to buy .958 (Britannia silver) although it is not often used for jewelry.
Gold is extremely malleable, and 24 karat gold, the purest form generally available (99% pure) is normally only used as a plating. By weight, 22 karat gold is 91.6% pure, 18 karat gold is 75% pure, and 10 karat gold is 41.7% pure, with the remainder being half copper and half silver. Coloured golds use different alloys, and white gold may have a higher silver percentage, or may use other metals, in place of part or all of the copper. Unfortunately cheap white gold often contains a high nickel content, causing allergies in some people*. For this reason those with allergies might actually be better with silver - it is possible to buy white gold plated with rhodium to prevent allergies, but this plating wears off over time.
Gold price at time of writing is about $1600US an ounce, and no matter how low it goes, it's still an expensive metal, which is the main reason people are willing to call 10 karat gold "gold", despite it being little more than 40% gold. Even 9 karat gold is acceptable in Europe, at just 37.5%. One reason for the high price is the waste involved in production. Only a tiny fraction of gold is retrieved from the ore (at best 1/10 of an ounce PER TON!!!) and a tremendous amount of power is needed to extract it. Also then, it is a very "environmentally unfriendly" product, and the waste ore is full of seriously hazardous materials.
Incredibly rare (but currently actually slightly cheaper than gold) platinum is the most highly prized of the commonly used precious metals. It is extremely easy to extract and is often simply a by-product of other mining processes. It is usually used at 90% purity, alloyed with iridium, although 95% is also used, and indeed popular, but is not very hard wearing, and is actually ill-advised for jewelry.
Even at 90% purity however, a platinum ring bought as an alternative to a 10 karat white gold ring is obviously far "purer" if purity is what is sought after, and is this purity that gives it its prestige.
(*For more details on metal allergies, please read my son's excellent article: http://www.mailleartisans.org/articles/articledisplay.cgi?key=27388)
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