Rich consumers invest in jewelery amid rising uncertainty, market volatility

When the gavel came down in December, Christie’s set a record that rocked the auction world.

Adorned with a Tiffany & Co. necklace A sparkling blue Paraiba tourmaline gemstone And the diamonds sold for more than $4.2 million, more than 10 times its low estimate. A matching pair of earrings came up on the next block and sold for 10 times its asking price.

Jacqueline DeSante, vice president and head of sales for Christie’s New York jewelry division, said, “I think it was really a sign of how far private clients are willing to go for these extraordinary items.”

Amidst economic and geopolitical uncertainty, a certain section of consumers are turning to an unlikely asset class – jewellery. The trend comes as investors are increasingly attracted to tangible assets. For ultra-wealthy consumers, colored gemstones such as rubies, sapphires and emeralds are particularly popular at this time.

“Anytime you have macroeconomic instability … the appeal of hard asset investing increases,” said Thorne Perkin, president of investment management firm Papamarkou Welner Perkin. “Tangible assets maintain or even increase their value when inflation increases.”

Mario Ortelli, managing partner of strategy and M&A consultancy Ortelli & Co., echoed Perkin’s opinion, saying there was clearly a “defensive element” to the trend.

“In times of inflation, geopolitical tensions or financial market volatility, tangible assets become more attractive,” he said in an email. “Branded jewelery can act as a portable store of value.”

“Unlike fashion accessories that are tied to seasonal cycles, prestige jewelery collections have a much longer product life cycle,” he said. “In many cases, they also exhibit stronger resale price dynamics than handbags. That longevity and perceived capital preservation helps explain the relative resilience of jewelry versus soft luxury.”

Luca Solca, global head of luxury goods at Bernstein, estimated that about a third of the renewed interest in gold-heavy and gemstone-driven jewelery could be linked to “flight to safety” behavior on the part of investors.

strong resale value

Rising gold prices have played a role. The price of gold, long considered a safe-haven asset, hit an all-time high above $5,100 an ounce in January. Although prices have declined, it is still trading high above $4,500 an ounce.

“I think that jewelery – gold jewellery, diamond and gemstone jewelery – is being viewed as an investment, obviously, fueled by the almost daily increases in the price of gold,” said Andrew Brown, founder and CEO of luxury resale platform MyGemma.

Christie’s DeSante said record high gold prices have encouraged some collectors to come out of the woodwork and sell some pieces.

Experts say jewelry’s durability is part of its appeal in the resale market. Brown said he regularly sees customers reselling branded jewelery years after their original purchase, often at prices that are far better than designer handbags that show much wear and tear during use.

According to Caroline Reel, senior investment manager of premium brand strategy at Pictet, jewelery has managed to buck the softening of the luxury market and has been growing “quite well” over the past two years.

Reel said she has seen consumers move away from “soft luxury” items like handbags and accessories. Additionally, “hard luxury” goods such as watches and fine jewelry have increased in popularity. Rayel attributed the change to previously strong demand and a steep increase in handbag prices due to supply chain disruptions.

Quality concerns have also been a hurdle, Brown said.

A study by Bernstein found that auction prices for Hermès’ iconic handbags have fallen, and the average resale premium for Birkin and Kelly bags has dropped from 2.2x in 2022 to 1.4x last November.

“Leather doesn’t have a lot of inherent value,” said Ankur Daga, founder and CEO of fine jewelry e-commerce company Angara. “As the price of gold continues to rise, people are realizing more and more that it is a very valuable asset.”

Durability has helped cement the reputation of jewelry as a long-term store of value, especially jewelry from renowned brands such as Cartier, Van Cleef & Arpels, Tiffany & Co., and Bulgari. Brown estimated that these four brands make up about 90% of MyGemma’s jewelry sales.

A ‘passion investment’

Jewelry also has an emotional element. Perkin calls this “passionate investing”, with consumers potentially attracted by the “element of prestige”.

Ortelli agreed. He said brand equity, craftsmanship and scarcity elements reinforce the perception of durability and value retention.

“Branded jewelry has historically experienced mid- to high-single-digit annual price increases over the long term, depending on the brand and design,” Ortelli said. “Since resale is often at a moderate discount to current retail pricing, over a 5-10 year horizon, owners can often walk away with above their original purchase price.”

‘Color is in vogue’

Ortelli said heavy gold jewelery benefits from the price level created by the intrinsic value of the metal. “However, exceptional gems – especially rare, high-quality sapphires, rubies, or emeralds – can command significant collector premiums,” he said.

The fashion trend currently favoring colored gemstones has emerged as one of the fastest growing jewelery segments.

Lucrezia Buccellati, jewelry designer and co-creative director of Italian jewelry house Buccellati, said this is especially true in Asian markets. He explained that colored stones allow for more creative designs and often attract buyers who want more unique and personalized pieces.

Consumers may also be looking for alternatives to diamonds.

“There is a real shortage of gem-quality material coming out of the earth,” said Angara’s Daga. He explained that it is more difficult to replicate colored gems in the laboratory. Unlike diamonds, the stone’s inclusions – or minerals trapped inside during formation – provide character and increase the value of a colored gemstone.

DeSante compared each to a piece of art, saying, “No two are exactly alike, and I think that’s what makes them so interesting for today’s market.” “In a world where we’re seeing lab-grown diamonds being made, and it feels like this conveyor belt… you can’t do that with sapphires or rubies or emeralds.”

Daga said he expects the price of colored gems to rise faster than that of gold.

“If you look at the Sotheby’s and Christie’s auctions, these gems are trading at numbers that no one would have imagined five years ago, and that’s only going to increase,” he said. “Color is in vogue.”

Daga said the colored gems have traded at auction houses at two to three times the estimate, which is “very unusual”, as auction houses usually adjust to low and high bids relatively well.

As evidence of the trend’s strength, Daga estimated that about 15% of engagement rings today feature colored gemstones, up from 5% a decade ago. They have perhaps become more popular thanks to celebrities like Kate Middleton, Eva Longoria, Halle Berry, Rita Ora and Halsey.

This trend has also attracted young consumers. DeSante said that in 2025, Millennials and Gen Z will account for 44% of Christie’s luxury buyers.

If widespread uncertainty persists, experts like Rayal said they expect jewelery investment to continue. Buccellati agreed, saying that within high luxury, he expects jewelery to continue to grow and overtake soft luxury goods.

However, there are some challenges, including liquidity, security concerns and storage costs. And unlike stocks or real estate, jewelry does not provide income to its owners.

“Jewelry should not be viewed as a financial asset on par with equities or ETFs – the liquidity, transaction costs and spread of returns are much higher,” Ortelli said.

He said the long-term outlook for branded luxury jewelery is positive, but cyclical.

“The category performs best in a supportive macroeconomic environment with increasing wealth creation and political stability. … In the event of a severe macroeconomic downturn, demand will decline,” he wrote.

And this is where some collectors may find comfort in the more emotional aspects of jewelry.

“I think there’s something really romantic about colored stone,” DeSante said. “When you think that it was formed on Earth hundreds of thousands of years ago, it’s really incredible. And if it’s a Kashmir sapphire – that mine was only mined for 20 years in the early 1900s – then there’s a certain romanticism behind it that you can’t replicate.”

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