Geo-political tensions such as the Ukraine and Russia conflict causes gold prices to fluctuate heavily. The New York Mercantile Exchange’s Comex division gold futures are trading near historic highs. Speculation that India, the world’s number two consumer of gold soon will lift curbs and ease taxes on gold also helped to boost prices. Even with curbs Indian consumers still buy more than 975 tons of gold a year mostly for jewelry purposes. China, the world’s largest consumer of gold still accounts for 1,065 tons of gold a year.
Increasing prices impact gold jewelry more than anything else. Rising prices make it more difficult to survive for the entry-level jewelry businesses. Businesses are experiencing huge sales drops and jewelry retailors are constantly reinventing themselves in order to survive. Purchases of gold jewelry are now limiting to weddings and engagements and buying for investment purposes non-existing. Besides prices, gold jewelry also faced with the increased competition from jewelry made from less expensive silver. But the sentimental and resale value of gold jewelry will keep the industry alive even during hard times. Even though a piece made of gold may not pay a dividend, a wearer may get an unparalleled satisfaction.