In the 1980s, long before Nadine Aysoy became a jeweler in London, she was a commodities broker in Geneva, trading, among other things, currencies, coffee, cocoa and gold.
As a trader, Ms. Aysoy said, she learned something critical about gold: “You need to hedge in this business. Otherwise, you won’t make it.”
Nearly 40 years later, Ms. Aysoy is once again shielding her business from the ups and downs of the gold market, this time as a buyer of the precious metal at a time when its price has been on a steep ascent. Over the past year, gold has broken record after record, reaching a new peak of $2,801.80 per ounce on Oct. 30. Despite declining somewhat in the wake of the U.S. presidential election, it is on track to break the $3,000 barrier, “but whether it comes this month or next year, we don’t know,” Jim Wyckoff, the senior market analyst for Kitco Metals, where he reports on precious metals and mining, said in a phone interview in late October.
“The latest acceleration came when the Federal Reserve unexpectedly cut interest rates by half a percent” in September, Mr. Wyckoff said. “Lower interest rates in the U.S. put pressure on the U.S. dollar and foreign exchanges, and that benefits the gold market because the dollar and gold prices typically trade in an inverse fashion.
“The latest push is also due to geopolitics being elevated,” he added. “Anytime markets become anxious, that benefits gold on a safe haven basis.”
Jewelers around the world have been on the losing end of that equation.
“It’s a challenge,” said Arun Dhaddha, the managing director of Gyan Jaipur, a fine jewelry brand in Jaipur, India. “It’s all about the wars and the situation in the world, and gold is going not into jewelry, but into investments and banks. Whenever we take an order, we freeze the price, but sometimes it’s a loss for us. When we have a bigger order, we need to have the money in advance so we can buy the gold that day at that price.”
Despite the challenges of working with a commodity that can cost more from one day to the next, jewelers said they remain committed to the metal, not the least because consumers appear to be equally steadfast in their desire for bold gold pieces, one of the overarching trends of 2024.
On a recent video call, Kether Parker, the brand director of Hoorsenbuhs, a high-end jewelry brand in Santa Monica, Calif., gestured to a 42-inch-long 18-karat gold chain around his neck, which retails for $58,000. “We haven’t had any problems selling our chains — there are 150 grams in this one,” he said.
“At the end of the day, this is still currency,” Mr. Parker added. “If the world ends, I could break off a few links and get some water and gas.”
Gold’s enduring value explains its reputation as a safe haven for investors. But jewelers like Mr. Parker tend to be enamored of its more primal characteristics. “There’s something different about gold on a human body,” he said. “It’s an energy. It’s a warmth. It’s the weight.”
Still, jewelry designers are businesspeople with budgets to balance. And they have responded to the challenging market conditions in myriad ways.
Some, like Ms. Aysoy, have simply raised prices to cover their rising costs. “From the moment I started the collection, which came out in 2019, I have increased the price by 30 percent,” she said. “It worries me in the sense that I’m selling less, which means that I have to make pieces that are a bit more expensive to just cater to the clients that I know will buy.
“I could start working with other materials like wood or enamel, but I will still need the gold, which I love.”
Paul Schneider, the co-owner of Twist, a jewelry retailer in Portland, Ore., said the price of gold is a topic of near-daily conversation with the dozens of contemporary designers his company represents.
“Designers have their formula of how they provide a margin for themselves, but ultimately they’re in a competitive marketplace,” Mr. Schneider said. “People are definitely raising their prices and they’re raising them constantly. And so far, the market has stayed strong. I’m kind of surprised, but that can’t go on forever.
“We had one designer with an 18-karat gold line who just doubled their prices,” he added. “My guess is we’ll probably lose them because their customer base will go away.”
To continue to offer his clientele affordable gold options, Mr. Schneider earlier this year introduced Twist’s first line of vintage jewelry, FFR Vintage, which includes plenty of stylish gold jewels at relatively affordable costs.
“There’s a really cute 18-karat gold fly pin for $1,000 and a lot under $2,000,” he said. “The jewelry was made a long time ago and the gold’s been paid for. And the dealers are still basing their prices on what they paid for the pieces.”
At Lylie, a fine jewelry brand in London founded by Eliza Walter in 2017, one solution to gold’s rising price came out of a circularity initiative introduced in 2020, when Ms. Walter began accepting gold trade-ins in exchange for credit toward the cost of new pieces.
“The initial idea was to offer a sustainable way of making jewelry: How can we get clients involved in circularity, but not be preachy about sustainability?” Ms. Walter said.
In 2022, in an expansion of its program, Lylie began sending reusable postal pouches to clients interested in trading in their old jewels. “We built this gold exchange calculator for our website,” Ms. Walter said. “You can use kitchen scales to take the weight of the different pieces that you have. Say you’ve got 20 grams of 14-karat gold. The calculator will give you the market value. And then we offer 7.5 percent above the market value.”
In the past year, a Lylie client in Canada used the service to cover the cost of three rings, Ms. Walter said. “She recycled a necklace that gave her about 20,000 pounds [$25,357] of credit and then she sent in another substantial gold necklace, and that cleared the remainder of the rings she wanted to make.”
The initiative has been so popular that Lylie no longer has to buy gold on the open market. “It’s supplying us with all the precious metal we need,” Ms. Walter said.
Ironically, some jewelers are adding diamonds and gems, which often are less costly, to their gold designs. “By creatively combining these elements, we reduce the overall gold content while adding unique texture and dimension to each piece,” Suzanne Kalan, a designer in Los Angeles, wrote in an email. “This allows us to preserve the luxurious feel and quality of our jewelry while staying mindful of cost.”
Nigora Tokhtabayeva, the founder of Tabayer, a line of statement jewelry crafted in 18-karat Fairmined gold, also has added hard stones to her pieces. “There are so many other materials that are very luxury — it all comes down to creativity,” she said. “You can take a beautiful piece of wood and make an exceptional jewel. Chalcedonies and carnelian are also quite beautiful.”
Equally ironic, at least to jewelers who were paying less than $400 an ounce for gold in the early years of the millennium, is the newfound appeal of platinum. Twenty years ago, the cost of the rare precious metal was roughly twice that of gold.
“I’ve started using platinum more frequently, as it’s now cheaper than gold,” Cora Sheibani, a London jeweler, wrote in an email. “Platinum is less malleable, allowing for finer settings and smaller links than gold. Its whiteness complements many colored stones, including those not traditionally set in platinum. This gives the designs a fresh look — gray spinels and pastel-colored tourmalines, for example, look fantastic in platinum.”
At the consumer level, however, the backlash to gold prices has yet to materialize, said Katie Rowland, a buying director for the online luxury e-tailer Mytheresa.
“We’re still going for that whole bold gold look,” Ms. Rowland said. “Obviously, we have our everyday gold items. But at the moment, we’re seeing our biggest growth from the 6,000 euro to 10,000 euro [$6,235 to $10,542] price point. And actually, over 10,000, we’re outperforming our stock.”
Gold’s enduring value has a lot to do with that demand, but so, too, does its intrinsic durability. For Kimio Fukutani and Takeshi Yokota, the co-founders of Kimitake, a fine jewelry brand designed and manufactured in Tokyo, gold’s chief appeal is that it can last well beyond a lifetime.
“We wanted to make something that could be passed down to the next generation,” Mr. Fukutani, the brand’s designer, said through a company translator on a three-way video call with Mr. Yokota, the chief executive, last month.
“The material has to last 50 to 100 years or more even,” Mr. Yokota said, also through the translator. “And it has to be suitable for jewelry making.”
That suitability is precisely why Vram Minassian, a jeweler in Los Angeles, said that he would never compromise on his use of gold.
“If it ends up being $10,000 an ounce, OK, maybe I’ll make less pieces, but I still have to work with gold because that’s my medium,” Mr. Minassian said during a recent pop-up event at Just One Eye, a lifestyle boutique in Los Angeles’s Sycamore district. “If gold goes the other way and becomes dirt cheap, am I going to pooh-pooh it? No, it’s not the value of gold that makes you want to work with it. It’s the quality.”
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