Jewelry Sales Surge Amid Stagnant Luxury Sector: A Buying Opportunity in Precious Metals and Gemstone-Driven Brands?

The luxury goods market is bifurcating. While handbags and apparel flounder, jewelry is thriving—a divergence highlighted by recent Citi analysis. Data shows U.S. jewelry sales surged 10.1% year-over-year in May 2025, defying broader sector declines. This article explores whether this outperformance signals a lasting shift toward "hard-asset" luxury and identifies investment opportunities in brands leveraged to precious metals and gemstones.

The Jewelry Divide: Data and Drivers

Citi's credit card data reveals a stark contrast: since September 2024, jewelry has been the only luxury category to post consistent year-over-year growth. Even in May 2025, when overall luxury spending dipped 1.7%, jewelry's double-digit rise stood out. The catalysts are clear:

1. Investment Appeal: Jewelry's intrinsic value from gold and precious metals makes it a hedge against economic uncertainty. Gold prices rose 25% since early 2025, yet jewelry brands like Cartier raised prices by under 5%. This lag creates a "valuation gap," making luxury jewelry a relative bargain.
2. Emotional Resonance: Jewelry's role as a gift or milestone commemorator—weddings, anniversaries—anchors demand even as discretionary spending tightens.
3. Structural Shifts: Buyers are spending more per transaction (+11.7% among high-end customers), suggesting a shift toward high-value pieces rather than frequent purchases.

Meanwhile, handbags and apparel struggle. Citi notes handbag brands hiked prices 30-40% post-pandemic without meaningful innovation, eroding perceived value. Apparel's slump reflects broader consumer caution, as shoppers prioritize essentials over fashion. Watches, while showing 14.7% growth in May, face inconsistency—top brands like Rolex saw a 10% decline, with sales skewed by retailers stockpiling ahead of potential tariffs.

Macro Tailwinds and Risks

The jewelry boom isn't confined to U.S. markets. China's post-pandemic reopening fueled a 48% surge in domestic gold and jewelry sales in early 2023, driven by pent-up demand and excess savings. However, geopolitical risks—like U.S.-China trade tensions and oil price volatility—threaten global demand.

Investment Implications: Targeting Jewelry Exposure

The data suggests investors should consider:
1. Luxury Groups with Strong Jewelry Lines:
- LVMH (LVMHF): Owns Tiffany & Co., Cartier, and Bulgari, which collectively account for ~25% of its revenue. These brands dominate high-margin jewelry segments.
- Richemont (CF瑞銀): Controls Cartier and Van Cleef & Arpels, benefiting from demand for heritage brands.
2. Pure-Play Jewelry Brands:
- Tiffany & Co. (TIF): A direct play on U.S. and Chinese demand, with a strong gemstone portfolio and pricing power.
3. Precious Metals ETFs:
- GLD (SPDR Gold Shares): Tracks gold prices, which underpin jewelry's investment appeal.
4. Resale Market Plays:
- RealReal (REAL): Benefits from rising secondary demand for high-value jewelry, though authenticity concerns linger.

Risks to Consider

• Overvaluation: Jewelry stocks like Tiffany have already surged 30% in 2025; overpaying could backfire if the trend reverses.
• Consumer Fatigue: If economic conditions improve, buyers might reallocate spending back to fashion.
• Counterfeit Threats: The resale market's growth hinges on authenticity guarantees, which require costly verification systems.

Conclusion: A Hard-Asset Hedge for Portfolios

The jewelry outperformance isn't just a cyclical blip—it reflects a structural shift toward tangible, sentiment-driven luxury. With gold prices rising and macro risks elevated, investors can treat jewelry brands as a hybrid of consumer discretionary and commodities plays.

Actionable Takeaway:
- Overweight exposure to LVMH and Tiffany, which combine jewelry dominance with global scale.
- Pair with gold ETFs to hedge against downside risks.
- Avoid pure fashion plays like Ralph Lauren (RL) unless valuations collapse further.

The luxury sector's bifurcation is a rare opportunity to bet on tangible assets in an uncertain economy. Jewelry's rise isn't just about sparkle—it's about survival.