State of the US Jewelry Market Q4 2024
Insights from Stanley Zale
There are several key challenges for the global jewelry industry currently.
One is the rapidly and still increasing price of gold. As of the writing of this article in mid-October, gold was trading at nearly $2,700 per ounce. Over the last 24 years the price has steadily increased from under $300 per ounce.
Source: World Gold Council
The second, affecting jewelers as well as diamond buyers and sellers, is the decreasing price of natural diamonds, primarily as the result of lower demand. The IDEX diamond index has dropped over 10% in 2024, while diamond industry analyst Paul Zimnisky is showing a YTD decrease of over 15%, and 10% for the price of rough diamonds.
Concurrently, we have also seen imports of polished diamonds into the US, arguably the most important market and most-watched, drop in the last couple of years.
How might all of this play out for the critical 2024 holiday season?
The higher gold price is impacting relative consumer spending ability. However, from a sentiment standpoint the (all-time) high price could actually have a positive impact on demand, i.e. it’s really valuable! This is especially the case in Asia, where gold has always been held in highest esteem as a symbol of wealth and social status.
The opposite has happened with diamonds: the low price has seemed to diminish consumers' perception of diamonds as a store of value.
This contradiction between the consumer behaviors surrounding these two "commodities" seems counterintuitive, yet there it is.
There’s been a lot of talk about diamond marketing, specifically for natural diamonds. Historically, demand has been driven by sufficient and proper marketing. And while it had seemed as though the industry had lost its way on that front, recently we have seen more moves by DeBeers to correct that recently. I’m looking forward to 2025 and beyond to see how that plays out in a positive fashion.
A bellwether for the entire industry is the financial performance of Signet group. Their Q2 same store sales were down 3.4%. Transaction count was down 8.8%, while average transaction value increased 1.6%. Very likely these results can be attributed to the increased price of gold, and their product mix with its relatively large percentage of diamond jewelry.
Much is being written about the strong decline in lab grown diamond pricing; no need to get into that here. So I will instead take this opportunity to remind readers that we all must be vigilant regarding the screening and detecting of undisclosed lab grown diamonds. Every member of our industry has a responsibility to correctly represent the product they are selling. This is no different from correctly stating the gold content of a piece of jewelry. This is OUR jewelry industry, and we have a collective responsibility to one another to do the right thing for the consumer. If one of us fails, we all fail.
To that end, I recommend you avail yourselves of resources such as Project Assure 2.0 to help you determine which is the right Diamond Verification Instrument for your business. Additionally, the Diamond Manufacturers and Importers Association, as a service to its membership and the industry, has Project Assure tested diamond screening resources for its members to use. Contact them at communications@dmia.diamonds.
Finally, I know there has been a lot of anguish about smash-and-grab, break-through break-ins, and other crimes against jewelers, especially retail stores. The Jewelers Security Alliance provides important information for jewelers who seek to reduce their vulnerability to an increase in crime directed at jewelry stores.
In summary, yes there is, as always, a lot going on. Those of us who have been in this industry for a while know that this is not new, but it’s challenging at every age and with every new issue that surfaces. Fortunately, we have terrific resources and organizations available, and I urge you to reach out to them for help with your own questions and needs. In addition, I, and the rest of our powerful team here at Hill & Co., remain committed to helping you. You can reach us at inquiry@hillandco.co and we’ll be glad to continue the conversation with you.
Best wishes for a prosperous holiday season.
Stanley Zale
