EditorsNov 15, 2024
Why Fine Jewelry Belongs at New York Comic ConSenior Editor Lenore Fedow makes the case for why more jewelers should be appealing to nerds at the annual event.
MajorsAug 10, 2020
Gold Passes $2K Per Ounce as Jewelry Demand Plummets
And the price is likely to keep rising this year.
The gold price rose to a record high this month, crossing the $2,000-per-ounce threshold. Pictured here is Gumuchian’s Honeybee “B” 18-karat gold and diamond linking bracelet.
London—The story of gold jewelry demand and price in the first half of the year is inextricably linked to the COVID-19 pandemic.
As nations across the world enacted lockdown restrictions, primarily during the second quarter, to slow the spread of the coronavirus, demand for both gold and gold jewelry plummeted, the World Gold Council said in its most recent Gold Demand Trends report.
Even as the pandemic severely hampered consumer demand, it also provided an opportunity for investment, with central banks and governments fueling record flows into gold-backed ETFs, lifting the gold price to record highs in several currencies.
As of Friday, the precious metal was trading at $2,034.80 per ounce, according to Kitco.com, a major increase since the start of the year.
In January, the gold price averaged $1,560.67, Kitco charts show.
The gold price continued to rise until mid-March, when it fell to a low of $1,474.25 as governments worldwide began enacting stay-at-home orders.
Then it began its rise again, increasing every month until it passed the $2,000-per-ounce price point in August, reaching its highest point in eight years.
And it doesn’t seem likely it will level out anytime soon, according to some experts.
A few sources have predicted the price of gold could increase to as much as $3,000 per ounce within the next 18 months or even by year’s end.
As the gold price continues its climb, jewelry demand has gone the other way.
According to the World Gold Council, gold jewelry demand was nearly cut in half during the first half of the year, falling 46 percent year-over-year to 572 tons, which it said is the lowest since it started keeping track.
It’s also around half of the 10-year average of 1,106 tons.
In Q2, demand reached a quarterly low of 251 tons, a 53 percent decline year-over-year, as consumers across the world felt the effects of lockdown and the resulting economic slowdown.
In the U.S., demand lost some of the momentum it had gained in recent years, falling 34 percent year-over-year in the second quarter to 19.1 tons, the lowest quarter in WGC’s series.
H1 demand was also down, declining 21 percent to an eight-year low of 41.9 tons.
WGC said store closures due to COVID-19 were the “clear reason” for the decline, made even more severe because the lockdown encompassed two holidays—Easter and Mother’s Day.
Demand “collapsed” in April
and May before recovering in June as stores slowly started reopening and consumers started spending their government-issued stimulus checks.
While the U.S. experienced a drop-off, China and India were the biggest contributors to the global demand decline in the first half of the year, WGC said. Their size when compared to the rest of the world means weakness there has “an overwhelming impact” on global demand.
Q2 jewelry demand in China fell 33 percent year-over-year to 90.9 tons, resulting in a 52 percent decline year-over-year in the first half of the year to 152.2 tons, its lowest H1 since 2007.
As the earliest market to emerge from lockdown, China was the only one to see a quarter-over-quarter recovery from “extreme Q1 weakness,” WGC said, and a “sizable” rebound in jewelry demand from the first quarter to the second.
Even with the upswing, first-half demand in the country remained “muted,” with retailers attributing the weakness to high gold prices, falling disposable incomes, and a greater preference for lighter-weight gold jewelry products.
Q2 gold jewelry demand in India plunged due to the country’s lockdown, the loss of a festival buying occasion and the higher gold price, declining 74 percent year-over-year to 44 tons, the lowest quarterly total in WGC’s series “by some margin,” it said.
This meant H1 demand was down 60 percent to an all-time low of 117.8 tons.
The country’s lockdown lasted from late March until mid-May, running through the important gold- buying festival of Akshaya Tritiya, with sales “trivial” when compared with the previous year as stores remained closed.
As restrictions eased in the middle of the second quarter, activity picked back up in some regions.
June saw further improvement but a lack of weddings and auspicious holidays in the month, as well as recurring lockdowns and the high gold price, hampered any meaningful recovery.
Gold jewelry demand in Europe also fell to an all-time low.
The second quarter was down 42 percent year-over-year to just 8.2 tons, taking the first-half total down 29 percent to 19 tons.
While the U.S. experienced a drop-off, China and India were the biggest contributors to the global demand decline in the first half of the year, WGC said. Their size when compared to the rest of the world means weakness there has “an overwhelming impact” on global demand.
Q2 jewelry demand in China fell 33 percent year-over-year to 90.9 tons, resulting in a 52 percent decline year-over-year in the first half of the year to 152.2 tons, its lowest H1 since 2007.
As the earliest market to emerge from lockdown, China was the only one to see a quarter-over-quarter recovery from “extreme Q1 weakness,” WGC said, and a “sizable” rebound in jewelry demand from the first quarter to the second.
Even with the upswing, first-half demand in the country remained “muted,” with retailers attributing the weakness to high gold prices, falling disposable incomes, and a greater preference for lighter-weight gold jewelry products.
Q2 gold jewelry demand in India plunged due to the country’s lockdown, the loss of a festival buying occasion and the higher gold price, declining 74 percent year-over-year to 44 tons, the lowest quarterly total in WGC’s series “by some margin,” it said.
This meant H1 demand was down 60 percent to an all-time low of 117.8 tons.
The country’s lockdown lasted from late March until mid-May, running through the important gold- buying festival of Akshaya Tritiya, with sales “trivial” when compared with the previous year as stores remained closed.
As restrictions eased in the middle of the second quarter, activity picked back up in some regions.
June saw further improvement but a lack of weddings and auspicious holidays in the month, as well as recurring lockdowns and the high gold price, hampered any meaningful recovery.
Gold jewelry demand in Europe also fell to an all-time low.
The second quarter was down 42 percent year-over-year to just 8.2 tons, taking the first-half total down 29 percent to 19 tons.
More on Majors
The Latest
CollectionsNov 15, 2024
Marie Lichtenberg Battles Counterfeits with New ‘Raiz’in Scapular’ DesignsThe latest “Raiz’in” drop showcases a newly designed “Scapular” necklace and donates a portion of the proceeds to Make-A-Wish France.
WatchesNov 15, 2024
Piece of the Week: Citizen’s Commemorative Pocket WatchNo. 1 out of 100, the timepiece was created to mark Citizen’s 100th anniversary and will be auctioned off at Sotheby’s next month.
Brought to you by
Navigating Cybersecurity: Essential Guidance for JewelersFrom protecting customer data to safeguarding inventory records, it's crucial to learn how to tackle cybersecurity challenges.
Recorded WebinarsNov 15, 2024
Watch: 10 Tips to Keep Your Jewelry Store Secure On the latest episode of “My Next Question,” two experts share best practices for store security during the holidays and year-round.
Weekly QuizNov 14, 2024
This Week’s QuizTest your jewelry news knowledge by answering these questions.
AuctionsNov 14, 2024
18th-Century Diamond Necklace Sells for Nearly $5M Sotheby’s sold the necklace, which potentially has ties to Marie-Antoinette, for $4.8 million to a woman bidding via phone.
WatchesNov 14, 2024
Grand Seiko Partners With Ben Bridge on First Hawaii Store The new Grand Seiko boutique is located in Honolulu’s Waikiki neighborhood.
Brought to you by
Enhance Your Expertise with IGI’s In-Person Courses in NYCThis fall, sharpen your skills in jewelry grading, quality control and diamond assessment.
SourcingNov 13, 2024
Gem Legacy Adventures Announces 2025 Trip Eleven spots are available for travelers to visit Northern Tanzania and Southern Kenya from July 25 to Aug. 4.
AuctionsNov 13, 2024
Aga Khan Emerald Sells for $8.8M, Sets RecordThe emerald brooch-turned-pendant returned to auction after 55 years, setting a world record for most expensive emerald sold at auction.
AuctionsNov 13, 2024
‘Exceptional’ Burmese Ruby Ring Tops $5M at Auction Phillips also sold a 1.21-carat fancy red diamond dubbed the “Red Miracle” for more than $1 million at its jewelry auction in Geneva.
MajorsNov 13, 2024
Royal Chain’s New Catalog Is Out NowThe 2024-2025 book introduces hundreds of new designs.
FinancialsNov 12, 2024
Cartier, Van Cleef & Arpels Continue to Shine for Richemont Richemont’s jewelry sales ticked up 2 percent in the first half of the year, while watch sales plummeted 17 percent.
GradingNov 12, 2024
GIA’s Next-Day Services Return for the HolidaysOffered by the lab since 2016, the holiday season special is good from now through mid-December.
CollectionsNov 12, 2024
Mikimoto and Chrome Hearts Blend Aesthetics in New CollaborationThe “Mikimoto Chrome Hearts” jewelry brings pearls from Mikimoto together with distinctive motifs from Chrome Hearts.
CollectionsNov 08, 2024
Piece of the Week: Larkspur & Hawk’s ‘Tapestry Lily’ Earrings These earrings use flat-backed white quartz to create a window onto an antique ribbon embroidered with a floral design.
Events & AwardsNov 08, 2024
AGTA Reveals Spectrum, Cutting Edge Award Winners for 2024This year’s AGTA Spectrum & Cutting Edge Awards included a new category for engagement rings and a new award highlighting female designers.
FinancialsNov 08, 2024
Brilliant Earth’s Q3 Sales Fall 13%Plus, CEO Beth Gerstein shares her insight on the holiday season and the possibility of new tariffs.
TrendsNov 07, 2024
Amanda’s Style File: Golden and Blue November HuesThe month’s birthstones, citrine and blue topaz, reflect the changing colors of the season.
CollectionsNov 07, 2024
Sidney Garber Collaborates With Carey Lowell on Capsule CollectionThe “Carey Lowell x Sidney Garber” collection stems from the friendship between the jewelry designer and ceramicist.
MajorsNov 07, 2024
Ritani Debuts ‘No-Fuss’ Holiday TV CampaignThe two ads highlight diamond engagement rings and diamond studs with a straightforward approach.
Policies & IssuesNov 07, 2024
Diamonds Do Good To Distribute $250K+ In Grants Next YearIn 2025, the nonprofit plans to continue its support of longstanding partners while also allocating some funds to a new initiative.
AuctionsNov 06, 2024
Two Rolexes With Ties to Titanic Head to AuctionThe Rolex watches are from the collection of “Titanic” co-producer Alfred “Al” Giddings and will go up for sale at Sotheby’s next month.
FinancialsNov 06, 2024
Pandora Posts Double-Digit Revenue Growth in Q3The Danish jewelry company plans to open up to 150 concept stores this fiscal year.
GradingNov 06, 2024
GIA to Close Lab in Ramat Gan, IsraelThe location will close by the end of the year due to it being financially unsustainable, GIA said.
MajorsNov 06, 2024
David Yurman’s Holiday Campaign Celebrates ‘Moments of Joy’The new campaign stars Sterling K. Brown, Hero Fiennes Tiffin, Winnie Harlow, Kyle Kuzma, Arizona Muse, and Iris Law.
CollectionsNov 05, 2024
Jacquie Aiche is Hosting an Online Treasure HuntOne lucky winner will receive a “Lizzie” diamond bracelet.
