U.S. jewelry demand to hit a 12-year high in 2021 - Metals Focus
(Kitco News) - U.S. consumers with a little extra cash in their pockets and nothing to spend it on have opted to buy more bling this year, as jewelry sales are expected to reach their highest level in 12 years, according to analysts at Metal Focus.
In a preliminary assessment of the North American jewelry market, analysts at the U.K.-based precious metals research firm said they expect jewelry consumption to increase by 140 tonnes, a 10% increase from 2019.
"If achieved, that would be the highest total basis our records going back to 2010. Such levels, of course, remain well down on historic highs of over 300t, following a decade or two of structural change," the analysts said.
The analysts said their anecdotal evidence highlights an increase in jewelry purchases as consumers have been unable to spend money on other luxury items like vacations. The analysts said that economic growth following the pandemic has also supported the market, which was devastated by the COVID-19 pandemic in 2020.
"The immediate macroeconomic backdrop is supportive with wages firming, unemployment low and lower-income groups' generous financial government support during the most uncertain phases of the pandemic," the analysts said.
The research firm also said that the market could be seeing a fundamental shift as consumers buy bigger pieces and are comfortable buying them online.
"Much has been made of a desire to gift jewelry to loved ones in troubled times, but it is argued that a newer desire to reward and enjoy oneself has emerged as lockdowns have eased, all of which has supported the self-purchase side of the gold jewelry market in a say $200-$500 sweet-spot," the analysts said.
It is not just North America that is seeing renewed growth in jewelry demand. Metals Focus said that the European market is also in the midst of a "solid recovery."
"In terms of consumption, following a slow start to the year, the recovery in jewelry sales has gained momentum in recent months, led by the re-opening of key economies. That said, the growth in Europe still seems to lag the U.S. due to ongoing caution towards discretionary consumer spending," the analysts said.