{"id":37509,"date":"2025-11-03T06:01:24","date_gmt":"2025-11-03T06:01:24","guid":{"rendered":"https:\/\/agooka.com\/news\/usa\/golds-wild-rally-traps-jewelers-between-soaring-costs-and-cautious-customers\/"},"modified":"2025-11-03T06:01:24","modified_gmt":"2025-11-03T06:01:24","slug":"golds-wild-rally-traps-jewelers-between-soaring-costs-and-cautious-customers","status":"publish","type":"post","link":"https:\/\/agooka.com\/news\/usa\/golds-wild-rally-traps-jewelers-between-soaring-costs-and-cautious-customers\/","title":{"rendered":"Gold&#8217;s wild rally traps jewelers between soaring costs and cautious customers"},"content":{"rendered":"<figure><img decoding=\"async\" src=\"https:\/\/i.insider.com\/6900d6650be9845f2dc539d0?format=jpeg\" alt=\"Isaac Yuan and Joanne Sim, the husband-and-wife team behind Eli J Fine Jewelry in Singapore\"\/><figcaption>Isaac Yuan and Joanne Sim, the husband-and-wife team behind Eli J Fine Jewelry in Singapore, have been adjusting designs and prices as gold costs soar.<\/p>\n<p>Huileng Tan\/Business Insider<\/p>\n<\/figcaption><\/figure>\n<ul>\n<li>Gold&#039;s record-breaking rally is squeezing jewelers&#039; profits and testing how much shoppers will pay.<\/li>\n<li>Feverish investor appetite for haven assets has sent gold soaring more than 50% this year.<\/li>\n<li>From boutique brands to global giants, jewelers are redesigning, repricing, and bracing for volatile costs.<\/li>\n<\/ul>\n<p>When Isaac Yuan started working in his uncle&#039;s jewelry factory in Hong Kong two decades ago, gold cost around $400 per troy ounce.<\/p>\n<p>In October, the metal neared $4,400 an ounce. The 43-year-old, now cofounder of Eli J Fine Jewelry in Singapore, calls the latest surge the most dramatic he&#039;s witnessed in the jewelry business.<\/p>\n<p>&quot;Everybody is talking about it. The move from $3,000 to $4,000 per ounce was really quite crazy,&quot; Yuan told Business Insider, referring to gold&#039;s price gains since March.<\/p>\n<p>Gold&#039;s epic rally this year has lifted the world&#039;s favorite precious metal to record highs, leaving jewelers around the world struggling to balance costs, design, and demand.<\/p>\n<p>Gold prices have surged more than 50% this year as investors piled into safe-haven assets, while central banks also stepped up their gold buying amid global geopolitical tensions.<\/p>\n<p>The spot gold price hit a record high of about $4,400 per ounce on October 20 before retreating sharply. Prices have since eased to around $4,000 an ounce.<\/p>\n<p>The price gains have stunned Yuan and his wife, Joanne Sim, Eli J&#039;s designer and cofounder. They had to rethink how they price their pieces.<\/p>\n<p>&quot;We try to absorb some of the cost if it&#039;s reasonable. We don&#039;t want to shock our customers, especially regulars,&quot; Sim said.<\/p>\n<p>Eli J&#039;s pieces are primarily made from 18-karat gold, which is 75% pure gold. As spot prices surged in recent months, the jeweler raised prices &quot;by a few hundred dollars&quot; per piece on average.<\/p>\n<p>That means profit margins could tighten by up to 10% this year, the couple said.<\/p>\n<p>The strain on buyers has begun to show. Sim said about 20 to 30% of customers pick cheaper 14-karat gold, compared with about 10% in the pre-gold-rally days.<\/p>\n<p>The store offers price-conscious clients who want white gold the option to switch to platinum, whose spot rate is around $1,595 per ounce.<\/p>\n<p>For ready-to-wear pieces, Eli J keeps prices within reach by using 14-karat gold for some designs and opting for thinner gold bands if the design allows. The jeweler has also held off launching new pieces with more complex, gold-heavy designs this year, in part because of high gold prices.<\/p>\n<p>Sim said most customers still prefer 18-karat gold pieces for heirloom-quality jewelry.<\/p>\n<p>&quot;At the end of the day, I think that those who want to buy fine jewelry or create a bespoke jewelry piece understand that gold is lasting, and that gold is forever,&quot; she said.<\/p>\n<h2>Asia&#039;s traditional jewelers feel the pinch<\/h2>\n<p>That tension between craftsmanship and cost is shared by traditional gold shops in Asia that typically charge by the weight of gold.<\/p>\n<p>At Kim Poh Hong Goldsmith, a third-generation family business in Singapore, demand for 22-karat gold jewelry \u2014 the heavy, machine-made pieces traditionally favored in much of Asia \u2014 has fallen 30% to 40% over the past two months.<\/p>\n<p>&quot;Prices are too high, nobody is really buying,&quot; owner Susan Tan told Business Insider in mid-October when gold prices were surging. &quot;We used to place orders with wholesalers every few weeks. We&#039;ve stopped ordering for now.&quot;<\/p>\n<p>The store&#039;s one bright spot is 20-karat gold Peranakan jewelry, a traditional local style known for its colorful enamel and intricate goldwork. The pieces are designed by Tan&#039;s sister and handcrafted in Singapore by elderly artisans.<\/p>\n<p>&quot;Customers may think over the prices for a few days, but they still come back if they like the design because they can only buy them here,&quot; Tan said.<\/p>\n<p>To sustain demand, Kim Poh Hong \u2014 like Eli J \u2014 has also taken a hit to its profit margins for such pieces.<\/p>\n<h2><strong>Record gold price depresses jewelry demand<\/strong><\/h2>\n<p>Overall investor demand for gold, from ETFs to bars and coins, is up. However, jewelry demand usually falls when prices rise.<\/p>\n<p>That demand slump is playing out across the world as customers spooked by gold&#039;s spike hold back on buying. In India and China, the world&#039;s top two gold-consuming countries, gold jewelry purchases by volume fell 31% and 18%, respectively, in the third quarter compared to the same period a year ago, according to the World Gold Council.<\/p>\n<p>&quot;The record gold price environment was the primary reason for the decline, simply due to affordability,&quot; wrote the council in a report last week.<\/p>\n<p>Even India&#039;s traditional gold-buying Diwali season, which recently ended, did little to lift jewelry demand.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/i.insider.com\/6900e794c007ca8c2737c4c1?format=jpeg\" alt=\"A showroom staff arranges a gold chain set at Kalyan Jewellers showroom in Mumbai, India.\"\/><figcaption>Festive jewelry demand is down in India this year as gold prices soar.<\/p>\n<p>Indranil Aditya\/NurPhoto\/Getty Images<\/p>\n<\/figcaption><\/figure>\n<p>Titan, one of India&#039;s largest jewelry retailers, said in an early October filing that fewer customers shopped for jewelry in July through September. But sales revenue rose 19% from a year ago, lifted by higher average ticket sizes as surging gold prices pushed up spending per purchase.<\/p>\n<p>The company said it made &quot;significant investments&quot; in marketing and promotional initiatives to boost demand. It also introduced 9-karat gold jewelry earlier this year, a lower-priced alternative aimed at value-conscious buyers.<\/p>\n<h2>Big global jewelers aren&#039;t spared, either<\/h2>\n<p>Even Pandora, Denmark&#039;s jewelry behemoth, isn&#039;t immune to industry turbulence. In its second-quarter results, Pandora said higher gold and silver prices shaved 80 basis points off margins from a year earlier, prompting price hikes to offset the pressure.<\/p>\n<p>But the precious metals rally has gotten so intense that the company broached the topic of using alternative materials during its earnings call \u2014 a delicate issue for a brand built on gold and silver.<\/p>\n<p>&quot;I can knock out stainless-steel jewelry if I want to,&quot; CEO Alexander Lacik said during the August earnings call. &quot;But what I need to understand is what does that do to people&#039;s perception of the brand, because that&#039;s a really strategic assessment.&quot;<\/p>\n<p>As companies recalibrate for higher costs, some jewelers say they hope that a softer gold price will steady demand heading into the winter holidays.<\/p>\n<p>&quot;With year-end employee bonuses coming, I think we still see a strong demand, especially towards the festive gifting season,&quot; Yuan said.<\/p>\n<p>Read the original article on Business Insider<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Isaac Yuan and Joanne Sim, the husband-and-wife team behind Eli J Fine Jewelry in Singapore, have been adjusting designs and prices as gold costs soar. Huileng Tan\/Business Insider Gold&#039;s record-breaking rally is squeezing jewelers&#039; profits and testing how much shoppers will pay. Feverish investor appetite for haven assets has sent gold soaring more than 50% [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":37510,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":{"0":"post-37509","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-usa"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/37509","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=37509"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/37509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/37510"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=37509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=37509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=37509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}