As the price of gold climbs, I wondered how this might impact jewelers such as Tiffany & Co. (NYSE: TIF), Signet Group plc (ADR) (NYSE: SIG), Blue Nile, Inc. (NASDAQ: NILE) and even Berkshire Hathaway (NYSE: BRK.A), which has large holdings in the industry. To explore this question, I talked with Amanda Gizi, Spokesperson for the Jewelry Information Center, which represents the fine jewelry and watch industries.

How will the increase in gold prices impact jewelers this Christmas season?

According to Gizi, most of the stock for the upcoming season has already been purchased, and while the price of gold might fluctuate, jewelers are not prone to adjust prices with every blip of the market.

How does this market differ from 1980, when jewelry sales suffered greatly under $900 gold?

Gizi pointed out that, given inflation, the current $700+ gold is not nearly as expensive as $900 gold was in 1980 dollars. Using the Bureau of Labor Statistic's inflation calculator, I found that gold would have to reach $2,270.94 in today's market to equal the value at its 1980 peak.

How would you assess the conjecture of CLSA Chief Strategist Christopher Wood, as reported by BloggingStock's Weld Royal, that gold could reach $3,400 in the next three years?

Gizi considered this unrealistic, given the market's history.

She went on to tell me that despite its sharp price increase, platinum continues to be a popular jewelry choice, especially in bridal selections, and other metals such as palladium and tungsten carbide are increasingly found in men's jewelry.

In gemstones, she told me fancies (gems in colors other than their common form, such as pink sapphires, blue diamonds, etc.) are very hot on the market now.

Her take on the industry? $700 gold isn't going to scare the merchants, and they don't expect it to scare away the customers, either.

My take? The cost of the gold in a piece of fine jewelry, at best, represents no more than 5-10% of the sale price, so the price of gold will have to increase a great deal before it severely impacts the jewelry trade. Don't sell your Tiffany and Co. out of gold fear.