Record gold prices reduce demand for jewelry

The US tariff policy and the resulting uncertainty in the global economy have increased the already high demand for gold as a safe haven asset, while the impact on the gold jewelry sector has turned out to be different.

Since the beginning of 2025, gold prices have risen by 33% to a record $3,400 per ounce. Demand for gold jewelry, particularly in the United Arab Emirates, has fallen by about 13%, compared to the global average decline of 11%. Buyers began to opt for lighter gold jewelry and lab-grown diamonds.

In 2024, India exported lab-grown diamonds worth $171 million to the United Arab Emirates (UAE). This is a 57% increase compared to the 2022 figure of $109 million. India's exports of cut and polished diamonds to the UAE grew by 3.7% in April–November 2024.

Shamlal Ahamed, managing director of the Malabar Gold & Diamonds, suggested that the growth in sales of jewelry with lab-grown diamonds is driven by the design of the products rather than lower prices. He is optimistic about demand for gold jewelry.

Goldman Sachs recently raised its forecast for gold price by the end of 2025 to $3,700 an ounce. The bank experts noted that the price could rise to $4,500.