Gold’s Surge Puts Margins Under the Spotlight

Why It Matters

The price shock reshapes profitability across the jewellery sector, rewarding brand power and design while squeezing low‑cost retailers, and it signals a strategic pivot toward alternative materials and pricing models.

Key Takeaways

• Gold price rose 67% in 2025, boosting jewellery value
• Luxury brands grew sales; mass‑market jewellers face margin pressure
• Designers add gemstones or platinum to reduce gold content
• Industry recommends dynamic pricing and smaller inventory batches
• WGC expects 2026 demand to stabilise but remains volatile

Pulse Analysis

The 2025 gold price surge—up roughly two‑thirds—has become a stress test for the global jewellery market. While the total value of sales climbed to $172 bn, the volume of gold used dropped 18%, reflecting consumers buying fewer, lighter pieces at higher prices. High‑end houses like Richemont, Cartier and Van Cleef & Arpels leveraged strong brand equity and iconic designs to absorb cost spikes, even posting double‑digit growth. In contrast, mass‑market retailers, for whom gold can represent up to half of production costs, saw profitability erode, prompting a scramble for pricing and inventory tactics.

In response, industry groups such as the UK National Association of Jewellers are urging retailers to adopt dynamic pricing tied to spot gold rates, streamline stock, and shift to make‑to‑order models. Designers are also re‑engineering collections—paving earrings with diamonds, incorporating larger gemstones, or substituting platinum‑plated alloys for silver—to curb raw‑material exposure. Platinum, historically a niche metal, is gaining traction as a higher‑margin alternative, especially in markets like India where its profit spread exceeds gold’s.

Looking ahead, the World Gold Council projects jewellery consumption to stabilise in 2026, though volatility remains. Brands that can marry design excellence with flexible pricing are poised to thrive, while price‑sensitive segments must continue innovating around material mixes and inventory practices. Investors should watch how luxury houses capitalize on brand loyalty and how emerging material trends, such as lab‑grown diamonds paired with platinum, reshape margins in a post‑gold‑spike landscape.