Editor’s Note
As gold prices have doubled in just two years, consumer behavior is shifting significantly. This article explores how record costs are deterring jewelry buyers and the broader implications for the industry.
The price of gold has doubled within two years. Many jewelry buyers are now reconsidering their purchases. How their behavior is changing and what consequences this has for the industry.
First, the ounce cost $3,000, then even $4,000: A record year for gold is coming to an end, with price levels that seemed unthinkable just two years ago. Alongside central banks, private investors and large institutional investors were among the buyers. It was their unprecedented demand that drove the gold price.
However, jewelry buyers held back noticeably. For a long time, they were responsible for around half of the global gold demand; now the value has fallen to one-third, as figures from the industry association World Gold Council (WGC) show.
Accordingly, the months from July to September were the weakest third quarter since the COVID-19 year 2020. Jewelry demand, at 419 tonnes, was about 23 percent below the same period last year.
In India and China, which account for around 50 percent of global gold jewelry demand, demand in the third quarter fell by 31 percent and 18 percent, respectively, compared to the previous year. China’s jewelry demand during this period was even as weak as it was last in the third quarter of 2007.