The global precious metals jewellery market is facing a challenging period, as supply chains across major markets are being forced to adapt following an extraordinary surge in prices. While 2025 and early 2026 saw a once-in-decades price spike that was subsequently replaced by a sharp correction across the broader precious metals complex, current absolute price levels remain significantly higher than they were just 12 months ago.
Elevated precious metal prices have undoubtedly strengthened the value proposition of jewellery, boosting related revenue growth. However, the same price strength is negatively impacting jewellery demand measured on a pure metal weight basis. As a result, global gold jewellery demand has been declining consistently in recent years, with its share of total gold demand also falling. Metals Focus forecasts that global gold jewellery consumption in 2026 will decline by more than one-third compared with 2023, dropping to its lowest level since the onset of the COVID-19 pandemic. Furthermore, this downturn is expected to see gold jewellery lose its position as the largest gold demand segment, being overtaken by the bar and coin investment sector.
Despite lower gold jewellery consumption volumes, consumer spending in value terms continues to rise. This divergence is particularly notable: consumers may still be allocating substantial funds to purchasing gold jewellery, indicating resilient demand intention, yet record-high gold prices mean that the gram weight of gold acquired per purchase has concurrently decreased. Therefore, revenue growth may be masking the underlying weakness in fabrication demand, refining throughput, and overall supply chain activity when calculated on a pure gold weight basis.
Additionally, in many major jewellery markets across South Asia, East Asia, and the Middle East, demand is concentrated in high-purity, fine gold products that serve both ornamental and quasi-investment purposes. As gold prices climb, the trend of consumers switching from gold jewellery to bars and coins has become increasingly pronounced, driven primarily by the lower premiums associated with investment-grade products.
Gold and silver jewellery demand is declining, while platinum shows growth
The contraction in gold jewellery demand has been widespread. During the first half of 2026, gold jewellery consumption in the world's two largest jewellery markets, India and China, fell by 17% and 30% year-on-year, respectively, while consumption in the rest of the world declined by 18% year-on-year. Looking ahead to the next six months, the core drivers supporting gold prices remain in place, including central bank purchases, the currency debasement trade, sovereign debt sustainability risks, US government policy uncertainty, and rising demand for portfolio diversification. Consequently, the likelihood of further gold price increases is considerable, which would place greater downward pressure on gold jewellery demand measured by weight.
Silver jewellery has exhibited a similar trajectory. Global silver jewellery fabrication demand has been declining following a temporary post-pandemic rebound, falling 8% in 2025, with this trend accelerating further in 2026. For this year, silver is expected to post the sharpest year-on-year decline among the three major precious metals used in jewellery. Platinum jewellery demand has shown relatively greater resilience but has not been entirely immune to the broader trend. Platinum jewellery demand has grown for two consecutive years, with 2025 volumes exceeding 2023 levels by a cumulative 20%. As gold becomes increasingly expensive, platinum has gained market share in the white precious metals jewellery segment, benefiting from substitution effects. Concurrently, platinum maintains a solid position in Western bridal and gem-set jewellery markets, while the growing appeal of two-tone platinum and gold combinations is also providing demand support.
In early 2025, the consultancy observed a shift among Chinese retailers in reallocating inventory strategy from gold toward platinum. However, this shift proved short-lived, as the gold-to-platinum price ratio, which was elevated in early 2025, had declined markedly by early 2026. With part of the earlier inventory build-up being gradually absorbed, combined with the impact of changes to China's gold VAT policy in late 2025, platinum jewellery demand this year is expected to decline overall year-on-year.
The three precious metals jewellery markets differ fundamentally in scale. In 2025, global gold jewellery fabrication demand was approximately $182 billion in terms of raw metal value, compared with just $8 billion and $3 billion for silver and platinum, respectively. However, when measured on a pure weight basis, silver becomes the largest segment at 189 million ounces, compared with 53 million ounces for gold and a mere 2 million ounces for platinum jewellery. Therefore, even a slight shift of gold usage from gold jewellery to other precious metals could have a significant impact on demand within those corresponding metal categories.
Gold is the largest precious metals jewellery market by value, based on calculation prices of $1,280 per ounce for platinum, $3,432 per ounce for gold, and $40 per ounce for silver.
In response to high precious metal prices, the jewellery industry's adaptation is already evident in product design and consumer purchasing behaviour. Across multiple markets, mass-market jewellery is shifting from higher-purity to lower-purity products, for instance, with India introducing an official 9-karat gold hallmarking system, although it is expected that 9k gold products will remain a niche offering in the local market. Precious metals jewellery manufacturers are increasingly adopting lightweight designs to reduce metal usage per piece, while gold-filled, silver-filled, and plated products are gradually gaining market share. The use of coloured gemstones, diamonds, and alternative materials such as wood, base metals, glass, and leather is also providing new directions for the value proposition of jewellery, reducing its dependence on increasingly costly precious metals.
Consumers are also purchasing less frequently, with some opting to postpone purchases or selecting smaller-weight designs for roughly the same total spend. Some buyers seeking gold price exposure are also shifting from high-purity gold jewellery toward lower-premium bars and small-format gold investment products.
The challenges posed by high precious metal prices extend beyond weakening consumer purchasing power. Working capital requirements rise as the same inventory volumes demand higher liquidity, and if inventory needs are met through precious metals leasing, financing costs also increase. Meanwhile, insurance and logistics expenses may rise accordingly due to the increased value of goods. These factors are further straining companies' liquidity, balance sheet positions, and credit facility headroom. Moreover, it is worth noting that labour costs have not declined, while energy costs are generally trending upward. The jewellery industry is therefore not only grappling with weakening demand across nearly all markets but also confronting the dual pressures of rising operational costs and increased operational complexity throughout the supply chain.
It should be recognised that precious metals jewellery retains its cultural, wedding-related, gifting, and investment appeal. Data indicates that even as precious metals usage declines, consumers' overall spending on the precious metals content of jewellery remains strong. More precisely, the current market reshaping is centred around purchasing power adjustments and industry adaptive strategies. The future success of industry players will depend on their ability to promptly adjust product mixes, sustain or broaden profit margins, while strengthening control over capital and logistics flows.