When Safe Havens Become Cost Centres: What Surging Gold and Silver Mean for Jewellery

Gold is doing exactly what investors want and exactly what many jewellers fear.

In periods of political instability, inflation and economic uncertainty, precious metals are expected to protect value. That is one of the reasons gold and silver have moved so sharply since 2022.

For the jewellery industry, rising prices create a more complicated reality. The material held as protection by an investor is the same material a jeweller must buy, finance, shape and place in a display cabinet.

As geopolitical tensions, tariffs and concerns over government debt continue to influence markets, precious metals are becoming more valuable and more expensive to work with.

Across the world, workshops, manufacturers, brands and retailers are being forced to reconsider metal weight, carat, pricing and production. Consumers are adapting too, purchasing lighter pieces, exploring different materials and placing greater emphasis on lasting value.

The precious metals rally is no longer just a story about investment markets. It is changing the jewellery itself.

Precious Metals Are Responding to an Uncertain World

At the 2026 CIBJO Centenary Congress in Vicenza, industry leaders examined how conflict, tariffs and sanctions are reshaping jewellery markets.

According to CIBJO, gold prices have risen by more than 140 per cent since 2022, while silver has increased by more than 180 per cent. Safe haven buying has played an important role, with investors turning towards tangible assets during periods of political and economic uncertainty. CIBJO

Gold is also benefiting from sustained central bank demand.

The World Gold Council reports that central banks purchased 289 tonnes of gold during the second quarter of 2026. Its latest survey found that central banks have acquired an average of around 1,000 tonnes annually over the past four years, compared with approximately 500 tonnes a year during the preceding decade. World Gold Council

This is no longer a short burst of defensive buying. It reflects a longer term reassessment of gold’s role within national reserves and global finance.

David Brough moderates a discussion on the impact of geopolitics on the jewellery industry at the 2026 CIBJO Centenary Congress in Vicenza. Image courtesy of CIBJO, the World Jewellery Confederation

Jewellery Is Buying Less Gold but Spending More

The consequences for jewellery are already visible.

Global gold jewellery consumption fell to 278 tonnes during the second quarter of 2026, a decline of 17 per cent compared with the same period a year earlier.

Yet the value of jewellery demand has continued to rise. During the first half of 2026, consumers spent approximately US$86 billion on gold jewellery, up 22 per cent year on year, despite purchasing less gold by weight. World Gold Council

That apparent contradiction reveals an important change in the market.

Consumers have not stopped valuing gold jewellery. They are simply receiving less metal for the amount they spend.

This creates a growing divide between volume and value. Fewer grams are being purchased, but those grams are carrying much higher prices.

Global gold ETF flows by region and total holdings from January 2024 to August 2026, showing US$29 billion in net inflows during 2026 to date. Chart courtesy of the World Gold Council

Design Is Becoming Part of the Economic Response

Jewellers cannot control the bullion market, but they can control how intelligently they use precious metal.

Manufacturers are responding with lighter construction, lower carat options, alternative alloys and designs that create visual impact without relying on heavy metal weight.

CIBJO heard that lighter jewellery, newly developed alloys and combinations of diamonds or coloured gemstones with precious metals are becoming increasingly important.

In some markets, lower carat gold is gaining ground. Platinum is also taking market share from white gold in parts of the high end sector, while gold plated silver is providing an alternative at more accessible price points. CIBJO Precious Metals Report

This does not necessarily mean jewellery must become less luxurious.

A lighter piece can still demonstrate exceptional design, engineering and craftsmanship. A lower carat alloy can introduce a different colour or improve durability. A smaller amount of metal can place greater emphasis on gemstones, texture and silhouette.

The most successful response will be creative rather than purely defensive.

Silver’s rising value is changing its position within the global jewellery market, placing new pressure on designers and manufacturers while reinforcing its status as a precious material. Photo credit: Pramod Tiwari on Unsplash.com, via CIBJO

Silver Is No Longer the Simple Alternative

Silver has traditionally offered jewellers an accessible route into precious metal design, particularly for emerging brands, independent makers and entry level collections.

Its own price rally now complicates that position.

The Silver Institute expects the global silver market to remain in deficit for a sixth consecutive year in 2026. The organisation estimates that the cumulative deficit across those six years will reach more than 760 million ounces. Silver Institute

Silver is pulled in two directions.

It is a precious material used in jewellery, silverware and investment products. It is also an industrial material required for electronics, energy technologies and other manufacturing applications.

That combination gives silver a different market dynamic from gold. Jewellery demand must compete with investment and industrial demand for available supply.

Silver may remain more affordable than gold, but it can no longer be treated as an entirely predictable or inexpensive substitute.

The gold to silver ratio from 1870 to 2025, showing the changing relative value of the two precious metals through annual averages and a ten-year moving average. Chart courtesy of the Silver Institute

Volatility Is a Business Problem

The headline metal price is only one part of the pressure facing jewellery businesses.

Rapid price movements affect quotations, production schedules, deposits, margins and replacement stock. A bespoke commission priced when gold is at one level may become less profitable if the metal rises before production begins.

Retailers also face difficult conversations with consumers who compare current prices with what a similar piece cost a year earlier.

This makes pricing discipline increasingly important.

Quotes may need shorter validity periods. Deposits may need to cover a greater proportion of material costs. Businesses may have to review prices more frequently and communicate more clearly about the relationship between metal weight, craftsmanship and final value.

For smaller makers, the pressure can be particularly intense. Precious metal must often be purchased before the finished piece is sold, tying up more money in raw materials and stock.

Consumers Are Changing How They Buy

High prices are also encouraging consumers to rethink what they purchase.

Some are choosing lighter pieces or lower carat gold. Others are buying fewer jewels but selecting pieces with greater emotional or lasting value.

Old for new exchange is becoming increasingly important, particularly in markets where gold jewellery already carries a strong association with savings and family wealth.

Remodelling may also become more attractive. Existing gold can be reworked, inherited stones can be reset and unworn jewellery can provide material value towards a new commission.

This creates an opportunity for jewellers able to offer trusted advice, valuation, repair and redesign alongside new products.

The relationship with the customer becomes more important when every gram carries greater financial weight.

Forecasts Suggest the Pressure May Continue

Metals Focus told the CIBJO Congress that it expects gold to move above US$5,000 per ounce by the end of 2026, while silver could exceed US$70 per ounce during the fourth quarter.

Forecasts are never guarantees, particularly in markets as volatile as these. Interest rates, currency movements, inflation, conflict and investor sentiment can change direction quickly.

What matters for the jewellery industry is that higher and less predictable metal prices are no longer an exceptional circumstance. They are becoming part of normal business planning.

Industry leaders discuss how conflict, tariffs and sanctions are affecting precious metals, diamonds and global jewellery markets at the 2026 CIBJO Centenary Congress in Vicenza. Image courtesy of CIBJO, the World Jewellery Confederation

The Jewels Club Take

The jewellery industry should resist treating rising metal prices as a problem that can be solved through price increases alone.

Passing every additional cost directly to the consumer may protect a margin in the short term, but it does not create a compelling reason to buy.

The stronger response will come through design, transparency and service.

Jewellers need to explain why a piece costs what it does. They need to show where craftsmanship adds value beyond the raw material. They need to use metal intelligently and create jewellery that feels substantial in meaning, even when it becomes lighter in weight.

There are opportunities here.

Remodelling, made to order production, mixed materials, lower carat alloys and better engineered construction can all help the industry adapt. Silver’s rise may also encourage designers to treat it with greater seriousness rather than positioning it only as the cheaper option.

Precious metals are becoming more precious. The challenge is ensuring jewellery becomes more thoughtful with them.

Discover More

Explore the World Gold Council’s Q2 2026 Gold Demand Trends, the Silver Institute’s 2026 market outlook and CIBJO’s report on geopolitics and jewellery markets