Editor’s Note
As gold prices reach unprecedented levels, traditional jewelry markets in India and China are facing significant headwinds. This article explores how local jewelers are adapting their strategies to attract customers who are increasingly viewing gold as an investment rather than an adornment.
The record surge in the price of gold (USD 5,080 per ounce as of January 26, 2026) is weakening jewelry sales in key markets, namely India and China. As consumers prioritize investment over jewelry, how are local jewelers adapting to continue attracting buyers?
Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers
The value of gold has nearly doubled over the past two years, rising from around USD 2,000 per ounce in December 2023 to USD 5,080 per ounce on January 26, 2026, making gold jewelry less affordable and weakening its demand globally. According to the World Gold Council, global demand for gold used in jewelry manufacturing fell by 18% during the first nine months of the 2025 calendar year. The hardest-hit countries were India and China, the world’s largest markets, where demand fell by nearly 25%, demonstrating how sensitive retail consumption is to price fluctuations in these regions.
While the retail sector slumped, investor interest in bullion, coins, and ETFs (exchange-traded funds) surged, recording double-digit growth in both regions. As gold prices continue to rise, buyers are turning away from jewelry towards investment, prompting major jewelers in key markets to offer “fresher” and lighter designs and readjust their operations to boost sales.
Indian jewelers are combining diamonds and precious stones with lighter-weight gold to attract value-conscious consumers as gold experiences an unprecedented surge. Last year, India became the world’s largest consumer of gold. For decades, the country has ranked among the top two markets, supported by the cultural importance and appeal of gold as an investment. However, with the relentless rise in the price of gold showing no signs of slowing, buyers are cautious and waiting for prices to stabilize, forcing retailers to adapt.
Kalyan Jewellers, India’s third-largest jeweler with a turnover of EUR 2.4 billion (INR 25,045 crore in March 2025), is not abandoning its expansion plans. Over the past nine months, the company has opened about fifty new stores and plans to open over a hundred more in the next three to six months, bringing its total number of stores worldwide to nearly 500.
