Industry Outlook with David Brough: March

04 Apr 2024

By David Brough

Gold prices hit record high after Easter break

Gold prices hit a fresh record high after the Easter break, underpinned by worries over U.S. inflationary pressures.

Bullion touched a record high of USD $2,288.09 per ounce on April 3, the latest in a series of all-time highs. In dollar terms, gold prices are up more than 10.8 per cent so far this year.

The reasons for the surging gold prices are linked to the precious metal’s safe-haven appeal against a backdrop of geopolitical turmoil, its attraction as a store of value during a period of rising commodity prices, and expectations of three interest rate cuts in the United States this year. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

The latest U.S. manufacturing data indicating a resilient economy had tempered slightly the likelihood of a June interest rate cut by the U.S. Federal Reserve (central bank) and contributed to a mild pullback in gold prices from their peaks on Tuesday, April 2. However, the market rallied again on April 3, supported by worries over nagging U.S. inflationary pressures.

Persistent high gold prices may drag on bullion imports into major consuming and jewellery-manufacturing countries, such as India and Turkey.

High volatility in gold prices can complicate sourcing decisions for jewellers. Strong gold prices may lead some UK jewellers and manufacturers to offer jewellery featuring lower purities of the precious metal, such as 9-carat gold jewellery, or may boost offerings of more affordable silver jewellery.

AMBERIF trade show in Gdańsk, Poland

The spring edition of AMBERIF (March 21-23, 2024) showcased an extraordinary variety of contemporary amber jewellery and object designs, as well as gold and silver jewellery, loose diamonds and gemstones, machinery and packaging.

Natural Baltic amber is fossilised resin from conifer trees that is millions of years old.

Visitors to AMBERIF, located at the AMBEREXPO venue in Gdansk, Poland, were up 20 per cent year-on-year on the first day, driven mainly by a rise in European and Middle Eastern attendees, the show’s curator Monika Szpatowicz said.

Chinese visitor numbers were little changed, she added. Chinese buyers are major high-end amber collectors.

Ms Szpatowicz also said AMBERIF had plans to expand the show in coming years, notably in the gold jewellery and silver jewellery segments, which complement amber.

The existing AMBEREXPO show space could accommodate the planned floor expansion, she added.

UK-based visitors to the spring edition of AMBERIF included Sarah Caldwell Steele, a leading authority on “Whitby jet,” the black fossilised wood renowned for having been used by Queen Victoria as mourning jewellery.

Source: David Brough (Jewellery Outlook)