Gold will now have Fairtrade premium of US$2,000 per kilogram.
The Fairtrade International Standards Unit has announced a new set of Fairtrade premiums for gold, silver and platinum, as set at its recent Standards Committee meeting.
The Standards Unit has outlined the premium changes as follows, which will affect the wholesale and retail price of Fairtrade and Ecological precious metals. All changes are set to take place from August 1 2013 and mark an update to premiums set on March 14 2011.
The current pricing system works against the price of gold as outlined by the London Bullion Market Association (LBMA). At present the Fairtrade Minumum Price (FMP) for Fairtrade conventional gold is 95% of the LBMA price plus at Fairtrade premium of 10% of the LBMA price.
After August 1 the price for Faitrade conventional gold will have a FMP of 95% of the LBMA price, with an additional Fairtrade Premium of US$2,000 (£1,300) per kilogram.
There are no changes in the FMP and FP for Fairtrade ecological gold, which remain FP of 15% of the LBMA price and FMP of 95% of the LBMA price.
For silver bullion the conventional and ecological FMP are both set at 95% of the LBMA price. The FP for conventional silver is 10% and for ecological at 15% of the LBMA price.
The FMP for conventional and ecological platinum are both set at 95% of the London Platinum and Palladium Market (LPPM) price, while the FP for conventional platinum will be 10% and for ecological platinum 15% of the LPPM price.
A statement from the Fairtrade International Standards Unit said: "The Fairtrade Premium is paid in addition to the price, whether it is the market price (which applies if higher than the Fairtrade Minimum Price), the negotiated price (negotiated to be higher than the Fairtrade Minimum Price) or the Fairtrade minimum price".
The Standards Committee meeting also discussed other aspects of standards relating to gold and precious metals. Its decision will be communicated when the full standard document is ready for publication, expected end of October.
To read the official announcement in full, click here.