Editor’s Note
**Editor’s Note:**
Gold’s historic rally past $4,400 per ounce is reshaping the jewelry industry, forcing brands like Singapore’s Eli J Fine Jewelry to rethink designs and pricing. The surge, described as the most dramatic in decades, is squeezing margins and even prompting discussions on alternative materials—a delicate pivot for gold-centric houses. Meanwhile, festive demand in India has softened, underscoring the broader strain on the sector.
In October, the metal approached the $4,400 (€3,818) per ounce mark. The 43-year-old, now a co-founder of Eli J Fine Jewelry in Singapore, describes the recent surge as the most dramatic he has ever experienced in the jewelry industry.
Isaac Yuan and Joanne Sim, the couple behind Eli J Fine Jewelry in Singapore, have adjusted their designs and prices in response to rising gold prices.
However, the rally in precious metals is so intense that the company addressed the use of alternative materials in its profit announcement. This is a sensitive topic for a brand built on gold and silver.
Demand for festive jewelry in India has declined this year due to rising gold prices.
Indranil Aditya/NurPhoto/Getty Images
The record-breaking rally in gold is squeezing jewelers’ profits and testing buyers’ willingness to pay.
Investors’ feverish appetite for safe-haven assets has driven gold prices up more than 50% this year.
From boutique brands to global giants, jewelers are changing their designs and prices and adjusting to fluctuating costs.
When Isaac Yuan began working in his uncle’s jewelry factory in Hong Kong two decades ago, gold cost around $400 (€347) per troy ounce (31.1 grams).
Huileng Tan/Business Insider
He was referring to gold’s gains since March.
This year’s epic gold rally has lifted the world’s most popular precious metal to a record high. It has presented jewelers worldwide with the challenge of balancing costs, design, and demand.
Gold prices have risen more than 50% this year as investors fled to safe-haven assets, while central banks also increased their gold purchases amid global geopolitical tensions.
The spot gold price hit a record high of around $4,400 (€3,813) per troy ounce on October 20, before falling back sharply. Since then, prices have recovered to around $4,000 (€3,467) per ounce.
The price surge has stunned Yuan and his wife Joanne Sim, designer and co-founder of Eli J. They have had to rethink the pricing of their pieces.
Eli J’s jewelry pieces are mainly made of 18-karat gold, which is 75% pure gold. As spot prices have surged in recent months, the jeweler has raised prices by an average of a few hundred dollars per piece.
This means profit margins could shrink by up to ten percent this year, the couple said.
The pressure on buyers has already become apparent. According to Sim, about 20 to 30 percent of customers are opting for cheaper 14-karat gold, compared to about ten percent before the gold rally.
The business offers price-conscious customers who want white gold the option to switch to platinum, whose price is around $1,595 (€1,382) per troy ounce.
For ready-to-wear pieces, Eli J keeps prices in check by using 14-karat gold for some designs and opting for thinner gold bands when the design allows. The jeweler has also delayed launching new pieces with more complex, gold-heavy designs this year, partly due to high gold prices.
Sim reports that most customers still prefer 18-karat gold for heirloom-quality jewelry.
This tension between craftsmanship and cost is also shared by traditional goldsmiths in Asia, who typically charge based on the weight of the gold.
Kim Poh Hong Goldsmith is a third-generation family business in Singapore. They have seen demand for 22-karat gold jewelry drop by 30 to 40 percent in the past two months. This is despite the fact that 22-karat gold, the heavy, machine-made pieces, is traditionally preferred in much of Asia.
The store’s only bright spot is 20-karat Peranakan jewelry. This is a traditional local style known for its colorful enamel and intricate gold work. The pieces are designed by Tan’s sister and handcrafted in Singapore by older artisans.
