- Gold hit an intraday record above USD 5,589 an ounce on 28 January 2026, then fell back toward USD 4,000 by mid-July. It is down roughly 20% from the peak.
- Cartier and Rolex prices went up anyway. Luxury price increases are a ratchet, not a thermostat.
- Richemont’s gross margin fell 190 basis points to 65.3%, and it raised jewellery prices citing gold costs.
- At the mass end the damage is far worse. Silver has gone from about 50% of Pandora’s cost of goods to 75%.
Gold has fallen about twenty per cent since January, and luxury jewellery has not become cheaper. It will not. Gold opened 2026 near USD 2,960 an ounce, touched an intraday record above USD 5,589 on 28 January, and settled back into the USD 3,950 to 4,000 range by mid-July, still roughly nineteen per cent above the same point last year. Across that entire round trip, prices at Cartier and Rolex moved in one direction. That asymmetry is the interesting part, and it explains more about how this category works than the commodity chart does. Here is what the gold shock has actually done to the maisons.
What Gold Actually Did
The scale of the move is easy to underestimate because the headline number has come back down.
- 2025: gold gained close to 65%, its strongest annual performance since 1979.
- 28 January 2026: intraday record above USD 5,589 an ounce.
- Mid-July 2026: around USD 3,985, down roughly 20% from the peak and still about 19% above the prior year.
- Forecasts: J.P. Morgan has an average target of USD 5,055 for the fourth quarter of 2026, with a path toward USD 5,400 by the end of 2027.
A category that plans production a year ahead and holds ageing inventory cannot absorb a range that wide. It has to make pricing decisions at a point on the curve and live with them.
50% to 75%. Silver’s share of Pandora’s cost of goods sold, before and after the metals rally, against labour at roughly 33%. When your raw material moves from half your cost base to three quarters of it, the business model has changed rather than tightened.
Why Prices Do Not Come Back Down
Because a luxury price increase is a repositioning, and repositionings do not reverse.
Cutting a list price confirms that the previous price was not earned, and it teaches clients that waiting works. That lesson does not expire, and it is the single most damaging thing a maison can do to its own pricing power. So when input costs rise, houses raise prices. When input costs fall, houses keep them there and take the margin.
Richemont demonstrated the mechanism precisely. Reporting its year to 31 March 2026, the group told shareholders its jewellery maisons had raised prices in the face of higher gold costs, describing the increases as measured and attributing them to raw materials and unfavourable currency. Gold has since fallen twenty per cent and those prices remain.
That is not opportunism, it is the discipline the category depends on, and we set out why in luxury brand management: the refusal to discount is the mechanism, and it only works if it holds in both directions.
What It Cost the Maisons Anyway
Raising prices did not fully protect the margin. Richemont’s gross margin fell 190 basis points, from 67.2% to 65.3%, on a combination of gold costs and adverse currency, with FX alone accounting for a negative 210 basis point impact at group level.
The jewellery division still performed. Richemont’s Jewellery Maisons posted FY2026 sales of EUR 16.5 billion, up 14% at constant rates and 8% at actual rates, with operating profit of EUR 5 billion and an operating margin of 30.5%, representing 74% of group sales. Watches fell 4% over the same period.
So the picture at the top is a category absorbing a serious input shock and still compounding, which is consistent with what we found in jewellery as the engine of the industry.
Volume and value have decoupled. Louise Street, senior markets analyst at the World Gold Council, noted that historically high gold prices through 2026 have led to significantly lower volumes of gold jewellery consumption, and that while high-end consumers are somewhat insulated relative to the mass market, demand has been affected across the board in volume terms. A category can report record revenue while selling fewer objects, and that is what has happened.
Where the Real Damage Is
Not at the top. The gold shock has been brutally regressive, and the further down the price ladder you go the worse it gets.
In India, jewellery volumes fell more than 30% as gold rose over 70% year on year, with consumers shifting to lower grammage, 18-karat, lightweight and studded pieces to manage cost. That is the same object at less weight, which is a category quietly shrinking its product to hold a price point.
The merchandising responses tell the same story:
- Gold-light, diamond-heavy design. Melee diamonds are now cheaper by weight than solid gold, which inverts a relationship that held for decades and has pushed operators toward stone-forward pieces.
- Platinum returning to hero collections, because the gold-to-platinum price gap has narrowed to historically tight levels.
- A strategic lean into silver and lab-grown at the volume end, explicitly to manage gold exposure.
None of those are available to a high jewellery maison whose entire proposition rests on material quality. It cannot make the piece lighter, substitute the metal or move to lab-grown without contradicting the reason the price exists. The constraint we described in jewellery branding, that the client can price your raw materials, cuts both ways in a rally.
The Second-Order Effect Worth Watching
High gold prices are simultaneously suppressing jewellery volumes and driving jewellery demand, depending on why someone is buying.
Japan is the clearest natural experiment. Department store sales of gems, precious metals and artwork rose 19% in the first half to a record JPY 330 billion, driven by domestic buyers treating jewellery as a store of value against a weakening yen, a dynamic we examined in Japanese buyers driving sales to a record.
That is the same commodity move producing opposite outcomes in two markets: destroying volume in India where jewellery is a purchase, and creating it in Japan where it functions as a hedge. Houses reading a single global demand figure are reading an average that describes neither.
Watch grammage rather than price. A category under material cost pressure holds its price points and reduces what it puts in the box, and that is measurable long before it shows up in a results statement. The maisons that keep the weight and take the margin hit are the ones whose pricing will still be credible when gold settles.
Bottom Line
Gold peaked above USD 5,589 in January and has fallen roughly 20% since, and no luxury jewellery price has followed it down. Richemont raised prices citing gold, absorbed a 190 basis point gross margin hit anyway, and still grew its jewellery maisons 14% at constant rates to EUR 16.5 billion at a 30.5% operating margin. The pain is concentrated at the volume end, where silver has gone from half of Pandora’s cost of goods to three quarters and Indian volumes have fallen more than 30%. For collectors, the practical consequence is that pieces bought before the rally were bought at material prices that will not return, and for the maisons the discipline to hold weight rather than quietly reduce it is what the next two years will test. The category’s structural advantages are set out in the resilience of heritage jewellery.
FAQ
Will jewellery prices fall if gold keeps dropping?
Very unlikely at the luxury end. Cutting a list price confirms the previous price was not justified and teaches clients to wait for reductions, which permanently damages pricing power. Houses raise prices when inputs rise and hold them when inputs fall, taking the margin. At the mass-market end, where competition is on price rather than on brand, some relief is more plausible.
Why did gold rise so sharply?
A combination of central bank buying, particularly by China and other major economies accumulating reserves as a safe haven, alongside private investor demand and broader macroeconomic uncertainty. Gold gained close to 65% during 2025, its strongest year since 1979, before reaching an intraday record above USD 5,589 in January 2026.
How do jewellers protect margins when gold rises?
Four responses dominate: raising prices, reducing the weight of gold in each piece, shifting design toward stones and away from metal, and substituting materials such as platinum or silver. Only the first is fully available to a high jewellery maison, since the others compromise the material quality the price is built on.
Is buying gold jewellery a good hedge against inflation?
The metal content tracks the gold price, but the brand premium above it does not behave like a financial asset and resale rarely recovers full retail. Buyers in markets such as Japan have been treating jewellery as a partial store of value against currency weakness, which works for the material component. Treating a branded piece as an investment generally disappoints at the point of sale.
