In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets.
Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset.
The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main jewelry-making hubs.
Photo: Reuters
“The main question that I’ve heard in the last months is if I can produce something lighter while having the same appearance,” said Massimo Lucchetta, owner of Lucchetta 1953, an independent jeweler which makes items for department stores in Bassano del Grappa, near Italy’s premier gold-crafting hub of Vicenza in the country’s northeast.
Vicenza, known as one of Italy’s three “cities of gold” alongside Arezzo in Tuscany and the Golden Valley of Valenza in Piedmont, hosts twice a year the Vicenzaoro fair, a global event for jewelry and watchmaking.
In Arezzo, several jewelry makers have stepped up the use of machinery that keeps a piece’s shape while cutting its metal content, said Giordana Giordini, owner of independent jewelry brand Giordini.
That could, for instance, keep the size of a pendant unchanged, but cut its weight in half.
“The person is still buying the same idea of what it is,” Giordini said from her workshop in Arezzo.
Her company supplies wholesalers and some retail stores, with nine out of 10 of its products shipped to international markets.
Italy in 2024 accounted for 11.2 percent of the US$130 billion global jewelry market, according to a recent study by bank Mediobanca.
More than 6,800 companies operate in the gold, silver and jewelry industry in Italy, employing almost 34,000 people, the study said.
Cecile Cabanis, finance chief at luxury behemoth LVMH, on Tuesday said that the price of gold had a negative effect on the performance of its watches and jewelry business, which includes high-end brands such as Bulgari and Tiffany.
That comes even though the French conglomerate, which has its flagship gold manufacturing site in Valenza, has implemented hedging measures, including the use of financial derivatives and negotiating the forecast price of future precious metals deliveries, according to its yearly report.
However, the pressure on smaller workshops is more acute. They are unable to hedge, due to the expense and the risks of trading in financial derivatives.
Sharp day-to-day swings in the price of gold and silver have a direct effect on retail prices as raw material costs are directly passed on to customers, Giordini said.
A gold necklace that cost 300 euros (US$358) a few months ago might now be priced at 500 euros, she said.
Giordini said that fluctuations in the price of gold can affect the costs facing businesses like hers by tens of thousands of euros, as they pay for raw materials upfront.
Valenza jeweler Alessia Crivelli, who is also the vice president of trade group Confindustria Federorafi, said that another option for producers is to recover and reuse scrap metals from their own production lines.
However, using recycled or resold gold is close to impossible because it can be difficult to certify its origin.
While high-end customers might view gold jewelry as an investment and remain willing to absorb higher prices, the need to also serve the less affluent consumers is driving the focus on reducing weight, another producer from Valenza said.
“If brands need a certain price positioning, they ask us in development to pay more attention to the final weight,” the producer said, asking not to be named because of customer confidentiality concerns.
Wedding rings, where weight constitutes a significant share of the cost, are becoming a focal point in price sensitivity for couples.
“If before they spent around 600 euros, today they may have to spend more than 2,000,” the producer said.
However, demand for gold jewelry is expected to endure as consumers continue to look at the metal as a store of value.
“In the end, they pay for gold because they want it to be gold,” the producer said.
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