Two decades ago, a young Isaac Yuan stepped into his uncle’s jewelry workshop in Hong Kong—a vibrant and bustling environment where craftsmanship merged with commerce. At that time, the global benchmark price for gold hovered around a modest $400 per troy ounce, a figure that now seems almost quaint when compared to the staggering prices the precious metal commands today. Fast forward to the present, and gold prices have scaled near-astronomical heights: in October, the spot rate briefly approached $4,400 per ounce. Now forty-three and the cofounder of Eli J Fine Jewelry, a boutique label based in Singapore, Yuan calls this meteoric rise the most extraordinary and volatile chapter he has encountered across his long tenure in the jewelry trade.
He described to Business Insider how conversations in the industry have been dominated by the metal’s spectacular ascent. “Everyone is talking about it,” Yuan noted, emphasizing that the sudden climb from roughly $3,000 to $4,000 per ounce since March occurred with dizzying speed. For seasoned professionals used to gradual market shifts, the momentum felt almost surreal.
The unprecedented rally has propelled gold—the world’s most enduring symbol of wealth and security—to its highest recorded values. Jewelry makers across continents are now confronting a dilemma: maintaining the allure and craftsmanship of their pieces while contending with skyrocketing material costs and increasingly cautious consumers. This year alone, gold’s value has surged more than 50%, a consequence of investors pouring capital into safe-haven assets amid global instability and geopolitical strain. Simultaneously, central banks, wary of inflation and currency volatility, have accelerated their gold purchases, amplifying the pressure on supply and price equilibrium.
After peaking at roughly $4,400 per ounce on October 20, spot prices experienced a sharp correction, retreating to levels closer to $4,000. Nonetheless, such figures remain unprecedented in the modern era. For Yuan and his wife Joanne Sim—Eli J’s cofounder and principal designer—the relentless rise in material costs has triggered constant recalibration of their business model. They have been compelled to reassess pricing strategies, ensuring that each design remains both desirable and within the realm of customer acceptance.
“We try to absorb some of the cost whenever possible,” Sim explained, reflecting on their effort to maintain long-term customer loyalty. “We don’t want to shock our regular clients, especially those who have supported us for years.” The brand’s jewelry largely consists of 18-karat gold pieces, a blend that is three-quarters pure gold and treasured for its fine balance between richness, durability, and enduring luster. Nevertheless, the dramatic escalation in spot prices in recent months has forced Eli J to increase retail prices by several hundred dollars for each individual item. As a result, the couple expects profit margins to thin by as much as 10% over the course of the year—a significant figure in a sector built on delicate cost structures.
The financial strain on buyers is increasingly visible. Sim estimates that about 20% to 30% of clients now opt for 14-karat pieces—significantly less pure but more affordable—whereas before the recent price explosion, only about 10% of sales fell into that category. For customers insistent on white-toned metals yet sensitive to gold’s swelling value, Eli J offers an alternative: platinum, currently priced at approximately $1,595 per ounce, offering both aesthetic similarity and relative cost stability.
To maintain accessibility and preserve their clientele, the jewelers have diversified their approach. For ready-to-wear designs, they incorporate 14-karat gold or use slimmer gold bands when design integrity allows, achieving similar luxury appeal at lower weight and cost. Moreover, the company has paused launching new gold-intensive or complex designs this year, mindful that consumer enthusiasm wanes amid volatile prices. Yet most of their patrons still prefer 18-karat gold pieces, particularly when commissioning heirloom-quality jewelry intended to be passed down through generations. “At the end of the day,” Sim observed, “those who choose true fine jewelry recognize that gold endures—it isn’t merely a trend but a timeless emblem of permanence and value.”
Across Asia, this tension between preserving artistry and surviving financial pressure resonates deeply, particularly among traditional jewelers who price their creations by gold weight rather than design complexity. At Kim Poh Hong Goldsmith—one of Singapore’s venerable third-generation family enterprises—the impact has been immediate. Demand for 22-karat jewelry, comprising the heavy machine-made pieces long favored throughout the region, has collapsed by 30% to 40% over just a few months. “Prices are too high; no one is really buying,” owner Susan Tan lamented in mid-October, during the height of the rally. She recounted that the business, which once restocked every few weeks, has now suspended wholesale orders altogether, adopting a cautious wait-and-see approach.
One notable exception has been Kim Poh Hong’s line of 20-karat Peranakan jewelry—delicate, locally crafted pieces known for their vivid enamel accents and intricate filigree work. Designed by Tan’s sister and handcrafted in Singapore by senior artisans, these items attract connoisseurs seeking exclusivity and tradition. “Customers might hesitate for a few days, thinking twice about the price,” Tan acknowledged, “but they usually return when they realize that these pieces are one-of-a-kind and available nowhere else.” Even so, preserving demand has required the company, like many peers, to absorb part of the increased material cost, thereby compressing profitability.
This pattern mirrors a broader global trend: although investor appetite for gold in the form of bars, coins, and financial instruments such as exchange-traded funds (ETFs) continues to surge, jewelry demand generally plummets when prices soar. Such a phenomenon is now visible across both major and emerging markets, where consumers increasingly postpone or downsize purchases. In India and China—the two largest gold-consuming nations—third-quarter jewelry demand, measured by volume, fell 31% and 18% respectively compared with the same period last year, according to the World Gold Council. The organization attributed the downturn primarily to issues of affordability, noting that the record-setting price environment had placed fine gold jewelry out of reach for many households. Even India’s Diwali season, typically a peak period for gold buying, contributed only modestly to sales this year.
In India, the subdued festive spirit is reflected at the retail level. Titan, one of the country’s largest jewelry brands, disclosed in an October report that while the number of individual customers declined between July and September, total revenue was still 19% higher year over year due to a rise in average spending per purchase—an inevitable effect of elevated gold costs. To bolster interest despite these headwinds, Titan has funneled significant resources into marketing and promotions while also introducing a 9-karat collection earlier in the year, catering to buyers seeking more accessible entry points to fine jewelry.
The turbulence transcends national boundaries, even affecting global giants such as Pandora. The Danish jewelry powerhouse revealed that soaring precious metal costs shaved 80 basis points off its profit margin compared with the previous year. In response, the company initiated a series of price adjustments to mitigate the impact, though the relentless rally in metals has sparked deeper strategic reflection. During its August earnings call, Chief Executive Alexander Lacik broached a delicate but necessary subject: whether Pandora might need to experiment with alternative materials such as stainless steel. He acknowledged that any such move would require careful consideration, since the brand’s identity and consumer perception are inseparable from its association with precious metals like gold and silver.
Across the jewelry landscape, many creators and retailers now await stabilization. As market participants recalibrate to accommodate higher baseline costs, there is cautious optimism that softening gold prices or seasonal demand could restore balance. Yuan himself expressed hope for renewed buying momentum toward the end of the year. “With year-end bonuses approaching,” he noted, “we expect to see stronger demand, particularly during the festive gifting season.” For jewelers worldwide, that hope represents more than an economic forecast—it is a wish for equilibrium between artistry, affordability, and the enduring allure of gold.
Sourse: https://www.businessinsider.com/gold-price-record-jewelry-cost-buyer-demand-design-profit-forecast-2025-11
