Gold prices keep rising, and jewelry companies are sounding the alarm

Amid global economic turmoil, precious metal prices are rising higher and higher.

price gold It has been particularly high over the past year, rising by more than 50%. For medium sized jewelry companies aiming to offer luxury gold necklaces, earrings and more At lower price points than older luxury jewelry brands, gold futures can pose a spelling problem.

Nevertheless gold Stocks are often vulnerable to market volatility, and investors have increased their holdings over the past year due to recession fears and market uncertainty, according to Goldman Sachs. Gold is on pace for its third straight year of double-digit gains, even reaching… Record levels This week during the government shutdown.

Gold prices rose on Tuesday $4000 per ounce For the first time in history – and they show no signs of slowing down.

Low interest rates, a weak dollar and political uncertainty will continue to push the price of gold higher, UBS analysts wrote last week.

“We now expect flows for the year to reach 830 metric tons, nearly double our initial forecast of 450 metric tons at the beginning of the year,” UBS analysts wrote in a note. “The main risk for gold is improved growth in the US, and if the Fed is forced to raise interest rates due to upward surprises linked to inflation.”

Goldman Sachs a report From late last month he predicted a rise, predicting that the price of gold would rise by 6% through mid-2026 to $4,000 per ounce, a unit of measurement used for precious metals. The report classified gold buyers into two groups: convinced buyers, who buy the metal constantly, and opportunistic buyers, who jump in “when they think the price is right.”

Analysts said they expect central banks to continue buying gold for another three years.

“Our rationale is that emerging market central banks remain significantly underweight to gold compared to their developed market counterparts and are gradually increasing allocations as part of a broader diversification strategy,” analyst Lena Thomas wrote.

According to July Survey data From the World Gold Council, nearly 95% of central banks expect global gold holdings to rise next year.

This uncertainty comes on top of an already turbulent global economy reeling from changing tariff policies from the president Donald Trump. Although he Explain In August, there will be no tariffs on gold, and bullion from Switzerland will not be subject to the country’s 39% tariff, and Trump’s high interest rates on other countries have disrupted trade. Global supply chain.

For jewelers, rising precious metal prices may be a cause for concern. Big retailers love Pandora and The ring They indicated that they are exploring higher prices or alternative manufacturing methods to counter the hit they are taking from gold.

Some jewelry companies that aim to offer gold products at lower prices, such as Megori, are also feeling the pressure.

Mejuri, which aims to sell The luxury gold and jewelry company announced at lower levels than its competitors, last month, that the company was forced to raise its prices due to the high cost of gold and silver and customs duties.

“While we have been doing everything we can to accommodate the impact and maintain the quality and craftsmanship you have come to expect from us, you will see some updated prices on Monday, September 29,” Migori wrote in an email to customers. “We are tackling these shifts head-on: simplifying our supply chain, enhancing sourcing and designing with pricing in mind.”

The company said it is also innovating new products such as 10-karat pure gold to continue offering high-quality jewelry at affordable prices. Migori declined to comment.

In the August second quarter earnings report, Pandora It said it faced an 80 basis point decline due to higher gold and silver prices, and that it plans some price adjustments to offset those headwinds. And on The ring In its most recent earnings call in early September, the company said it had seen a more than 30% increase in the cost of gold.

BaubleBar, which specializes in fine jewellery, offers a wide range of “semi-fine” gold pieces, which co-founder Daniela Jakubowski said has allowed the company to avoid the brunt of gold price pressures to some extent.

The company’s semi-fine jewelry features a thick, high-quality layer of 18-karat gold over a sterling silver base, allowing BaubleBar to avoid the costs associated with solid gold jewelry. The brand’s luxury semi-earrings range from $50 to $150.

“We’ve already seen a significant increase in interest in demi-fine,” Jakubowski told CNBC. “I think it offers people a really great alternative to pure gold…. You’ll get a really great quality similar to that at a lower price.”

However, what is worrying is that significant events affecting the global economy are occurring at higher rates than they were five years ago, Jakubowski said. She said it does not appear to be as volatile as gold prices have been rising in the industry “for a long time.”

She said that the solution lies in companies taking advantage of their ability to make smart choices.

For Alexis Bitar, CEO of the jewelry company that bears his name, the smart choice meant relying on gold-plated pieces, allowing the company to save costs on solid gold, and raise prices slightly to match the incoming products.

But Bitar said that the company is not re-pricing any of its current products.

“You’re constantly moving between tariffs and gold price acceleration, so you’re staying within a price point that’s known to you,” Bitar said. “On the consumer side, they don’t really care. They vaguely know that gold prices are going up…but mentally, they have an unconscious price point that they’re looking to spend, and when you start exceeding it, you’re pricing people out.”

Bitar said his company sees a “cautious” consumer, but any decline in spending is more likely to be tied to solid gold than plated gold, and that the affluent consumer base is more willing to pay higher prices than low- or middle-income shoppers.

Even for ear piercing company Rowan, which also offers gold jewelry, the rapidly changing industry can pose a spelling problem. It’s hard to imagine any other industry whose raw material costs have risen as dramatically as gold, CEO Louisa Schneider told CNBC.

Because ear piercings require a certain level of surgical steel or titanium for optimal healing, Rowan often uses 14-karat gold to cover those materials, leaving the company “somewhat insulated” from the rising price of gold because it is required to uphold certain health and safety standards.

However, Schneider said Rowan had to raise prices on some of its gold pieces at the beginning of the third quarter, which she said customers were willing to pay because the company specializes in hiring trained nurses to perform piercings.

“This is a sign of fear,” Schneider said. “This is very worrying in my view.” “We expect that we do not see a significant decline in current prices – if anything, we expect gold to remain very expensive. So we will continue to hedge ourselves and work closely with our sellers.”

Schneider said she sees an “inflection point” in the price of gold and that it is a cause for concern for all jewelry companies, especially those that cannot raise their prices to meet costs because they sell to non-luxury consumers who are less flexible to price changes.

Ultimately, she said this is a warning sign for the broader economy, even if it doesn’t hit Rowan too hard.

“The demand is not coming from consumers who want to wear gold or industries that require gold as an element of manufacturing,” Schneider said. “This comes from gold hoarding given the uncertainty about the US dollar, and this is unlike anything we have seen,” he added.

Correction: A previous version of this story misstated Signet’s sales.