Key points
- “When you have $3,000 to spend on luxury, are you going to buy a handbag or a piece of jewelry for the same price.
- The Citigroup analyst also pointed out that unlike handbags, which have seen price hikes of up to 40% since the pandemic with minimal design innovation, many iconic jewelers like Cartier have kept price increases modest — under 5% in 2025 — despite the surge in gold prices of over 25% this year.
- The luxury sector had hoped for a stronger start to 2025 after a robust fourth quarter in 2024, buoyed by holiday spending and post-election optimism.
Gems and Jewellery News: A Sparkling Surprise in the Luxury Sector
A new trend is reshaping the U.S. luxury market — and it glimmers with gold, diamonds, and sentiment. Amid concerns over economic instability and political uncertainty, American consumers are unexpectedly redirecting their luxury spending away from fashion and accessories, and pouring their dollars into high-end jewelry instead.
Even large jewelry pieces are selling well in America.
Image Credit: Van Cleef & Arpels
This Gems and Jewellery News report reveals that, while overall luxury spending has dipped in the first half of 2025, jewelry sales have defied the downturn, surging in both value and popularity. According to a fresh report from Citigroup, based on data from over 10 million U.S. credit card users, luxury jewelry spending in May 2025 rose by a remarkable 10.1% compared to the same month last year. Meanwhile, other upscale categories like handbags and ready-to-wear saw stagnation or decline.
Emotional Value Meets Investment Appeal
So what’s driving this unexpected boom in fine jewelry? A Citigroup analyst offers a simple yet powerful explanation — jewelry holds both financial and emotional value in uncertain times. “When you have $3,000 to spend on luxury, are you going to buy a handbag or a piece of jewelry for the same price?” he asks. “Perhaps the jewelry gives you superior intrinsic value due to its precious metals content, and superior emotional value and meaning.”
The Citigroup analyst also pointed out that unlike handbags, which have seen price hikes of up to 40% since the pandemic with minimal design innovation, many iconic jewelers like Cartier have kept price increases modest — under 5% in 2025 — despite the surge in gold prices of over 25% this year. That combination of relative affordability, perceived longevity, and timelessness is attracting consumers seeking both value and sentiment.
Luxury Consumers Are Spending Smarter
Even within the jewelry segment, there are telling shifts. While a few top-tier brands experienced a 2.7% decline in customer numbers, those who stayed spent 11.7% more on average. Perhaps more significantly, jewelry was the only luxury category that witnessed an increase not just in average spend per customer, but also in the number of individual customers purchasing.
By contrast, other luxury sectors like handbags and apparel have not fared as well. Although brands like Hermès managed a modest 0.2% increase in spending year over year, it pales in comparison to jewelry’s sustained growth. Luxury watch sales showed a mixed picture — total spending across all watch brands rose by 14.7% in May, but the top-tier brands saw a 10% decline, possibly due to price sensitivities and oversupply issues related to fears of upcoming tariffs.
Macroeconomic Woes Driving Consumer Decisions
Behind this shift lies a broader story of economic anxiety and geopolitical uncertainty. The weakening U.S. dollar, looming tariff resumption on global trade, and rising oil prices due to the Iran-Israel conflict are all shaping how Americans perceive and spend their money. These conditions are reinforcing jewelry’s appeal as a safer, more meaningful choice in the luxury space.
The luxury sector had hoped for a stronger start to 2025 after a robust fourth quarter in 2024, buoyed by holiday spending and post-election optimism. Instead, luxury spending declined sharply — down 8.5% in March and 6.8% in April — before moderating to a 1.7% drop in May. Jewelry was the outlier, climbing steadily month after month since September 2024.
The Citigroup analyst cautions that while the May numbers hint at improving consumer sentiment, it’s premature to declare a full rebound. “We know the U.S. consumer feels better about life when the dollar is strong,” he noted. “That impacts everything from travel to the willingness to spend abroad on luxury goods.”
Tariffs and Tensions Threaten Stability
Looking ahead, more turbulence could lie on the horizon. The 90-day pause on President Trump’s proposed 31% reciprocal tariffs is set to expire within weeks. At the same time, international instability and oil price spikes could further erode consumer confidence. In such an environment, fine jewelry’s hybrid appeal — equal parts emotional and practical — makes it uniquely resilient.
The Citigroup analyst underscored the importance of product differentiation too. He noted that luxury handbags have seen little innovation over the past five years, with few brands offering fresh designs or functional improvements. “From brand A to brand B, most bag shapes and styles are difficult to differentiate,” he remarked, whereas jewelry consistently offers more variety, heritage, and perceived permanence.
The Rise of Jewelry as a Symbol of Stability
As the luxury landscape evolves, fine jewelry is emerging as the category best positioned to weather the storm. It combines artistry, intrinsic value, and the power to commemorate major life moments. For American consumers navigating a shaky economy and uncertain global outlook, investing in a piece of fine jewelry is more than a purchase — it’s a statement of stability, value, and emotional connection.
Whether it’s a gold bracelet that retains its value, a diamond ring that marks a new chapter, or a necklace passed down as a family heirloom, jewelry is proving itself as a rare luxury that continues to shine through the shadows of market unpredictability.
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