Gold prices have repeatedly hit record highs, leading to increasingly long queues outside stores like Laopu Gold. Meanwhile, diamonds and silver have become the biggest casualties of this trend.
Diamonds are the first to suffer. By December 2025, the price of 0.5-carat natural diamonds had fallen by 20% within a year. The long-held belief in diamonds as eternal symbols has crumbled, with the impact spreading from the consumer market to upstream suppliers.
Silver jewelry is not faring well either. Pandora, for example, experienced a significant setback in the Chinese market last year, closing 95 stores directly. In contrast, gold jewelry has surged alongside skyrocketing gold prices, a trend clearly reflected in brand financial reports.
Laopu Gold is projected to achieve a 217% increase in performance for 2025, following a 251% rise in the first half of the year alone. Similarly, institutions forecast a 125% year-on-year growth in net profit for Chow Sang Sang.
Beyond niche markets like jade and colored gems, the three major jewelry categories—diamonds, silver, and gold—have shown completely opposite trajectories in 2025. Is the jewelry industry underperforming, or does gold inherently possess a unique protective appeal?
The diamond industry's crisis is not new. De Beers' performance has declined year after year since the pandemic ended. Founded in 1888, De Beers once controlled about 85% of global rough diamond distribution. Although its share has dropped to 63% due to antitrust pressures and new mining sources, its performance remains a barometer for global natural diamond consumption.
Since 2023, De Beers has been operating at a loss, leading to two diamond price cuts in 2024 and 2025, totaling around 25%. Even before gold's dominance, diamonds faced a formidable rival: lab-grown diamonds. These possess identical properties to natural diamonds but are produced in laboratories, shifting the industry from geological exploration to manufacturing.
In 2018, the U.S. Federal Trade Commission redefined diamonds to include lab-grown ones, acknowledging their authenticity. That same year, De Beers launched its lab-grown diamond brand, LightBox, implicitly recognizing the category's market position. However, as diamonds transitioned from natural marvels to manufactured products, pricing power became uncertain.
According to industry data, China's lab-grown diamond output reached approximately 22 million carats in 2024, a 144.44% year-on-year increase, accounting for 63% of global production. To prevent a total price collapse, De Beers cut its output by 23% in 2024 and further reduced production by 35% in the last quarter. Despite these measures, De Beers reported a loss of $511 million in 2025.
In 2023, De Beers revived its classic slogan, "A Diamond is Forever," while slashing prices for LightBox, attempting to emphasize the superiority of natural diamonds. However, consumers remained unconvinced. Within parent company Anglo American's portfolio, De Beers has shifted from a cash flow business to a liability earmarked for divestment.
If diamonds are losing to technology, silver jewelry is falling victim to shifting consumer consensus and gold's rising appeal. Both are precious metals, but only gold retains its value. A ¥20,000 Laopu Gold piece may resell for around ¥16,000, a 20% discount, while a ¥2,000 Pandora silver item might fetch only ¥200, a 90% loss.
This disparity stems from how premiums are applied. Gold jewelry stores prominently display daily gold prices, making raw material costs transparent. Thus, gold jewelry margins are generally low, often below 20%, with China Gold Group's毛利率一度 falling below 3%. Gold jewelry pricing follows the logic of "gold price + processing fee," allowing prices to rise or fall with gold values.
Laopu Gold innovated by popularizing fixed pricing, decoupling jewelry prices from gold fluctuations and achieving毛利率 around 40%. However, its recent price hikes have coincided with a bull market for gold, leaving its strategy untested during a gold price decline.
In contrast, silver jewelry operates differently. Pandora's毛利率 consistently exceeds 75%, nearing 80%, outperforming gold, diamonds, and even luxury brands. Silver is a financial asset, but silver jewelry lacks investment value. Brands rely on design, aesthetics, and marketing to justify high premiums, making a 90% discount rate acceptable given low material costs.
Moreover, silver jewelry's absolute price is generally lower than gold or diamonds, placing it in competition with crystal brands like Swarovski rather than gold. However, over the past 12 months, silver prices surged 163% in secondary markets, posing a dilemma for silver jewelry brands: rising costs cannot easily be passed onto consumers.
For Pandora, silver constitutes about 30% of its cost of sales. Doubling raw material costs without a corresponding increase in design value creates significant pressure. Raising prices risks alienating consumers, as silver jewelry's key price range of ¥800–3,000 overlaps with lightweight gold jewelry. If prices approach gold levels, silver's lack of保值属性 becomes glaringly apparent.
Pandora's CEO lamented in an earnings call, "We are a jewelry brand, not silver traders." The company's organic growth slowed to 13% in 2024 and 6% in 2025, with a -1% outlook for 2026. Since 2019, Pandora's revenue share in China dropped from nearly 10% to 1%, no longer disclosed separately in 2025 reports. This decline suggests silver jewelry consumption is being diverted to gold, particularly in East Asia.
Even crystal jewelry suffers. In 2024, Pandora and Swarovski saw sales drop 28% and 25%, respectively, on Chinese e-commerce platforms. In response, Pandora plans to shift at least 50% of its products to platinum-plated jewelry by 2027.
Gold's sweeping dominance, leaving diamonds diminished and silver pivoting, stems from its sustained price rally over the past year. Record-breaking prices have amplified gold's保值属性, influencing consumer purchasing decisions.
Typically, buying gold combines consumption and investment. When gold prices fluctuate within a range, it leans toward pure consumption. However, during a bull market, spending on gold gains a perceived "legitimacy" as an investment. Compared to similarly priced diamond, gemstone, or silver jewelry, gold's value retention adds an investment dimension to the purchase.
At ¥300 per gram, gold may be associated with ostentatious displays; at over ¥1,500 per gram, its allure takes on a refined appeal. Beyond Laopu Gold and Chow Sang Sang, Luk Fook Holdings reported a 25.6% revenue increase and a 42.5% rise in net profit for the first three quarters of last year.
Over the past year, gold jewelry brands have widely emulated Laopu Gold's ancient craftsmanship and fixed pricing strategies. Anxious traditional luxury brands are targeting high-net-worth individuals indifferent to gold's保值属性.
Tiffany & Co., under LVMH ownership, has undergone a radical transformation. Since high jewelry drove a threefold sales increase in four years, the brand shifted focus from affordable silver to gold and high jewelry, cutting about one-third of its silver offerings. Cartier, with annual price hikes around 10%, continues to see stable 14% growth in Richemont's jewelry segment.
Chrome Hearts and Goro's exemplify extreme溢价 strategies. Chrome Hearts severs price ties to materials, relying on controlled distribution and celebrity endorsements to maintain secondary market premiums. Goro's, a handmade silver brand, operates a single store for over 50 years, using waiting lists and selective sales to create artificial scarcity and elevate prices.
The willingness of the top 1% to pay exorbitant prices remains beyond imagination for most.