Gilded market: Has jewellery demand lost lustre?
Historically, gold jewellery has captivated civilisation as it is considered a symbol of wealth, power, and artistry. Gold jewellery can be traced back as early as 4400 BC, however, it may have been crafted and worn much earlier.
Ancient gold jewellery has been discovered by archaeologists on a dig in modern day Bulgaria, where hundreds of gold jewellery pieces have been found belonging to the Thracian era — Indo-European people who emerged during the early Bronze Age around 3500 BC.
However, while gold is shining brighter than ever – sitting at US$3,250 ($5,068) per ounce at the time of writing – jewellery’s role in the precious metals’ story is losing its lustre.
According to the World Gold Council, jewellery accounted for 391 tonnes of gold demand in the three months to June 2024 alone. While this was roughly 20% lower than the previous year – due to the then gold price rising – jewellery remains the largest driver of demand, accounting for 50% of all demand.
However, during Q1 2025, gold jewellery demand dipped, weighed down by the very forces that are fuelling the precious metal’s rise in value.
In 2024, gold jewellery was a clear outlier, with annual consumption dropping 11% to 1,877 tonnes as consumers could only afford to buy in lower quantities, as reported by the World Gold Council. Nonetheless, gold jewellery spend has increased 9% to US$144 billion ($245 billion) on the back of higher prices.
Since then, and while gold prices reach historic new heights, jewellery demand has shown a sharp decline in Q1 2025 — the lowest since demand was halted by the 2020 pandemic.
In Q1 2025, global jewellery demand came in at 479 tonnes, which is 3% above the first quarter average from the past five years of 465 tonnes. However, in value terms, consumer spending on gold jewellery increased 9% year-on-year to US$35 billion.
Comparatively, overall gold demand increased 1% year-on-year in Q1 2025, driven by the spectre of US tariffs, geopolitical uncertainty, stock market volatility, and the US dollar’s weakness. The World Gold Council reports the demand for gold increased to 1,206 tonnes – representing the strongest first quarter since 2016.
So, where and how has jewellery lost its lustre?
Australian buying group Nationwide Jewellers General Manager Glen Pocklington says the cost-of-living crisis and the associated retail environment affects consumer purchasing patterns, particularly discretionary or luxury products such as jewellery and watches.
“Black Friday as a retail event continues to expand each year, and its shifting consumer spending patterns by bringing forward purchases that would traditionally take place closer to Christmas,” Pocklington says.
“While it presents opportunities for promotions and strong sales, it also disrupts the traditional holiday sales period, creating both opportunities and risk for jewellers.”
Jewel economy
The two largest gold consumers globally — China and India — have both seen a dip in jewellery demand, largely driven by the record high gold price and economic uncertainties.
In China, gold is often gifted to younger members of the family and traditionally, newborn babies are given gold in the form of tiny bracelets or necklaces. Meanwhile, India has one of the largest markets for gold worldwide and places a central role in the country’s culture.
For China, the World Gold Council reports gold investment demand should remain strong in the near-term, as the escalating US and China trade war hurts growth and local assets.
According to the BullionVault, China’s gold coins and retail investment bar purchases totalled 138 tonnes — representing a 29.8% increase from Q1 2024. On the other hand, gold jewellery’s demand in China dipped 26.9% year-on-year by weight to less than 135 tonnes during Q1 2025.
For India, jewellery demand has also been dimmed in light of the price surge.
The World Gold Council revealed India’s gold demand witnessed a 15% year-on-year decline to 118.1 tonnes in Q1 2025. The council forecasts the demand is expected to be between 700 to 800 tonnes this year.
India’s jewellery demand fell even lower by 25% to 71.4 tonnes during Q1 2025 in contrast to 95.5 tonnes in Q1 2024 — the lowest volume since 2020.
This slowdown in demand has left retailers resistant to restocking, as they face challenges in meeting payment terms with manufacturers, resulting in a liquidity crunch within the industry.
A liquidity crunch, also known as a liquidity crisis, is caused when there is a sudden shortage of liquid assets making it difficult for businesses and individuals to meet their short-term financial obligations.
In Jeweller Magazine’s recent Australia’s Independent Jewellery Landscape Buying Group Report, concerns have been raised by independent jewellery retailers about the depressing levels of consumer confidence and discretionary spending, as well as the transient nature of product preferences.
The top two Australian jeweller buying groups — Nationwide Jewellers and Showcase Jewellers — have witnessed a decline in members across Australia and New Zealand.
For Nationwide Jewellers, the group had 391 Australian and 78 New Zealand members in 2016. In just shy of 10 years, the group has seen a 22.38% decrease with 290 Australian and 73 New Zealand members. In conjunction, the group’s stores across Australia and New Zealand has fallen 16.2% since 2016.
In the Showcase Jewellers’ case, the group has experienced a 19.1% decrease in members, with 178 members in 2016 in comparison to 144 in 2025. Interestingly, Showcase Jewellers’ stores represent a 29.26% decrease.
The Jeweller Magazine report says increasing competition from e-commerce businesses and the rising use of digital marketing as technological disruptions to conventional retail practices are becoming more concerning for these independent retailers.
Showcase Jewellers Managing Director Anthony Enriquez says there is a growing preference for online shopping, which has necessitated a stronger digital presence and e-commerce capabilities.
“Many members are grappling with interest rates and inflation that have constrained consumer spending, especially on discretionary items such as jewellery,” Enriquez says.
The rising gold price seems to cloud the demand for gold jewellery, and as such, the retail environment becomes vulnerable to the rapidly changing consumer preferences, weakened consumer confidence, alongside discretionary spending and broader economic pressures.
Source: https://mining.com.au/