Is the Gold Price Rise Causing Jewelry Purchases to Slump?
The price of gold is repeatedly hitting new records: it has now reached new all-time highs, over $3,800 an ounce (1 ounce equals 28.3 grams). A year ago, it was $2,600. It’s inevitable that a price increase of over 40% in 2025 alone, and 70% in 12 months, while it has doubled in two years, will impact the cost of jewelry. Considering that silver is also at a new 45-year high, at €40 an ounce, it’s inevitable that jewelry prices have doubled, discouraging purchases. Globally, the World Gold Council estimates, jewelry consumption has been declining since the beginning of the year in terms of volume, though not in value, as less is being sold but at a higher price. In the second quarter of 2025, the WGC estimates, it fell to 341 tons, the lowest since 2020 and 30% below the average of the last five years.
According to analysts, the season of large-scale gold jewelry purchases in China, and now in India, has started off subdued. Bernard Dahdah, an analyst at the French investment firm Natixis, believes that “at prices above $3,200 an ounce, we have begun to see signs of demand destruction in the jewelry sector and for 45% of total gold demand.” In China, for example, jewelry consumption fell to its lowest level since 2010 in August, the analyst notes. In India, where the festival season has begun, the jewelers’ association predicts a 27% drop in gold sales: record prices are pushing consumers to buy less, choosing smaller pieces or lower carats.
Gold prices are so high that even central banks, the main buyers of the yellow metal in recent years, have curbed purchases. Paradoxically, gold prices are rising while purchases are declining: according to the World Gold Council, between the first and second quarters, the official sector reduced purchases by a third, to 166 tons, and in the first half of the year, it stood at 415 tons. Gold prices are therefore rising also because few are willing to sell while waiting for further increases. And, according to many analysts, there is room for new gold records.
