Gold Price Surge Lifts Jewelry Value, Even as Demand Falls

Higher jewelry receipts are flattering the market, but they are not proving stronger demand. Sherry Smith has argued that the real story is inflation, not exuberance: gold logged 53 all-time highs in 2025, unit sales slipped, and average tickets rose because the metal became more expensive, not because more pieces moved.

The World Gold Council’s numbers back that up. In the first quarter of 2025, the LBMA gold price averaged US$2,860 an ounce, up 38% from a year earlier, after multiple new record highs. That surge was fed by tariff fears, geopolitical uncertainty, stock market volatility and a weaker U.S. dollar, a combination that pushed jewelry into a tougher affordability zone.

In the United States, gold jewelry demand fell 5% in volume in the first quarter, even as the value of that demand climbed 32% to US$2 billion. Consumers were still buying, but they were buying differently, with higher prices doing much of the work. Globally, the picture was more severe: gold jewelry demand dropped 21% year over year to 380 tonnes, while value still rose 9% to US$35 billion. India, one of the most important jewelry markets in the world, saw demand fall 25% to 71 tonnes, even as value rose 3%.

By year-end 2025, the pattern had hardened. The World Gold Council said jewelry demand volumes declined year over year in every market it tracks, while value rose everywhere because higher gold prices more than offset the drop in unit sales. Full-year gold demand topped 5,000 tonnes, and jewelry demand value reached a record US$172 billion, up 18%. The math is simple: a rising metal price can make revenue look healthy even as fewer necklaces, bangles and rings leave the showcase.

For jewelers, that is the trap. A bigger sales figure can hide weaker traffic, smaller baskets and a customer base trading down in weight, karat or size to stay within budget. Smith’s warning is pointed: if retailers mistake price inflation for real demand, they risk the wrong mix, the wrong inventory and the wrong read on what shoppers can still afford when gold keeps setting records.