Precious Materials Insight; Demand for yellow gold jewellery resilient, but unbranded silver struggles
01 Oct 2020
UK retailers are seeing growing demand for yellow gold jewellery, coinciding with a softening appetite for unbranded silver, says Helen Dimmick, the NAJ’s Retail Ambassador.
Soaring gold prices since the start of lockdown have driven sentiment that the yellow metal has lasting value and pushed customers increasingly to seek repairs and remodelling of their gold jewellery, said Helen, a well-known industry consultant who presented jewellery trends in a “Bubbles” webinar for the NAJ in late September.
“We are seeing an increased spend on gold and precious-set jewellery overall in comparison to silver,” Helen said.
“Jewellers are appreciating an increased percentage allocation of luxury spend, instead of, for example, holiday expenditure and with a consequential ‘pandemic mindset’ to ‘live for the moment’, appreciating loved ones and so on.
“Sentimental, memorial and meaningful gold pieces are therefore selling more – engraved signet rings, St Christopher’s, crosses etc.”
Bespoke demand for precious jewellery is also holding up well.
Jewellery manufacturers such as NAJ member Andre Michael are now offering bespoke services for gem-set gold and platinum jewellery to retailers, and see this segment as a growing part of their businesses.
Hatton Garden-based diamond jewellery supplier said,
“We are making it easy for the retailer. We have a dedicated team who handle bespoke orders using CAD design. We are a ‘one-stop shop’.”
Customers often identify designs on the internet that inspire them and request their own interpretation from their local family jeweller.
Image: Bespoke gold jewellery by Andre Michael
Andre Michael said,
“They typically want to buy the piece, custom-made, from their local retailer – and not from the internet”.
Along with the increased demand and celebration of coloured stones, yellow gold mounts and settings are becoming more popular to enhance and celebrate the gemstone colour and to define a contrast to white metal.
Another trend in gold jewellery demand is a preference for recycled metal, underpinning growing customer sentiment that recycling is an effective way to help safeguard the environment as it means the metal is not newly mined.
Helen continued,
“We are seeing a lot of repairs and remodelling of gold-set items which may previously have been forgotten (at home). The trend to re-cycle and up-cycle yellow gold pieces is evident.”
The soaring gold price and the uncertainty in people’s lives triggered by the pandemic have contributed to the desire to own a piece of gold jewellery, Helen said.
Customers have a perception that gold is likely to hold value over the longer term.
“An awareness of the increase in gold prices reminds people of the gold jewellery that lies forgotten and unworn in jewellery boxes,” she said.
In the engagement ring market, 18-carat white gold has lost ground to platinum pieces, as platinum prices are at a big discount to gold.
During times of crisis, gold prices tend to benefit from heightened investor demand due to their “safe haven” appeal, whereas platinum is primarily an industrial metal linked to its use in catalytic converters in motor vehicles.
“We can comfortably promote the properties of platinum (as a jewellery metal) with the added bonus that it is also more cost-effective (relative to gold),” Helen said.
“However, an increased desire for more unusual cuts (in diamonds), maybe lower colours of diamonds, ‘salt-and-pepper’ or coloured gemstones as engagement rings, opens up both platinum and yellow gold,” she added.
The desire for the reassurance of luxury during the pandemic, may have contributed to a slide in demand for unbranded silver jewellery, Helen said. A way forward was for retailers to promote silver jewellery under their own brands.
“Smaller or lesser-known brands with messaging and symbolism are doing well,” she said.
“Otherwise retailer own branded silver is the way forward.”
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Source: David Brough