Washington area consumers who purchase gold and silver jewelry solely for investment purposes are making a mistake, retailers and manufacturers warned yesterday.

As the price of gold jumped to yet another record yesterday -- $575.50 an ounce in New York -- retail stores here reported that sales of gold jewelry are up as much as 20 percent over last year.

The price of silver, meanwhile, climbed proportionately more yesterday -- to $38.85 an ounce.

"We have customers calling constantly checking on the prices of our gold jewelry to find out if they have gone up," said a representative of Bloomingdale's. She said most customers are buying for investment reasons.

"People see prices of gold going up, and they relate a $100 piece of chain jewelry to the $500 cost of an ounce of gold," said Patrick McCaffery of Ciani Manufacturing Co., an accessory jewelry firm.

But manufacturers and retailers agree that that is a misconception.

That chain necklace, McCaffery said, may contain less than $20 worth of gold, depending on its weight and purity.

Dennis Callahan, a senior vice president of The Hecht Co., explained that retail prices for gold jewelry reflect workmanship, design and style as well as gold content.

"The intrinsic gold value in any piece of merchandise is not totally in direct relationship to the price on the market," Callahan said.

When melted, most 14-carat jewelry "is worth only 25 percent of pure gold," he said. If the jewelry is purchased when the market value is $550 an ounce, he said, its value would have to rise to $2,240 an ounce to recoup the $550.

"If they [consumers] want gold," McCaffery said, "they should buy investment gold [bars, nuggets and coins]."

Industry officials blamed promotional ads featuring gold jewelry at substantial markdowns for leading consumers to believe that they could beat soaring gold prices by snapping up gold jewelry.

"I get exasperated when I see those ads putting a high original retail price on [gold jewelry] and then showing a markdown," said Jac King, owner of the Georgetown Jewel Gallery.

"My sales pitch to my customers is: 'Don't buy this as an investment. You can't go out a month from now and resell it [for a profit].'"

King said that a customer who buys a piece of gold jewelry and then tries to sell it back to a gold dealer may get less than half the original price.

"Say they bought it for $100 from a department store. But the department store only paid the manufacturer $50 or $60 for it, and I wouldn't pay more than it would cost me to get it from the manufacturer, he said.

McCaffery said that the maxim for buying silver jewelry is about the same as for gold jewelry. Neither of them should be purchased as investments, he said.

However, there is more silver in a piece of silver jewelry than there is gold in a piece of gold jewelry, he said.

Local retailers have watched the value of their merchandise soar as the prices of gold and silver have continued to rise.

Buyers for Hecht's, for instance, purchased the jewelry now on their shelves in October and November when the price of gold was about $350 ounce, according to Callahan.

But as prices rise, he said, the buyers don't know when -- or to what extent -- they should buy more.

The increasing prices, however, won't signal an end to special jewelry sales, Callahan said. "We'll always have people willing to cut profit margins to sell gold jewelry."

And he said that silver sales, which "have not been great" during the last five years, may experience a resurgence.

Jewelry sales for W. Bell & Co., a catalogue company with a chain of showrooms in the Washington area, are up "most definitely" over last year, according to Barry Berman, a buyer for the company, even though Bell prices are up about 20 percent.

Price increases were made after the fall catalogue was printed, Berman said. "This puts a strain on us and our customers . . . and there is some [customer] resistance when they are told there is a new price."

But, he said, customers are paying the higher prices anyway because "they see what is happening" in the gold market and at jewelry stores.

Berman said some people are buying jewelry as an investment. "I think this is because people are reading . . . all the propaganda being pushed around on financial pages."