High-net-worth consumers invest in jewelry amid heightened uncertainty and market volatility

When the gavel fell in December, Christie’s had set a record that had the auction world buzzing.

A Tiffany necklace adorned with sparkling blue Paraiba tourmaline gemstones and diamonds sold for more than $4.2 million, 10 times its reserve price. Then the matching earrings were a hit, also selling for 10 times the estimated price.

“I think this was an indicator of how much retail customers are willing to buy these great pieces,” said Jacqueline DiSante, vice president and head of sales for Christie’s New York jewelry division.

Amid economic and geopolitical uncertainty, certain consumer groups are turning to an unlikely asset class: jewelry. This trend comes as investors increasingly flock to tangible assets. Gemstones in colors such as rubies, sapphires, and emeralds are currently particularly popular among ultra-wealthy consumers.

“Every time there is macroeconomic instability…hard asset investing becomes more attractive,” said Thorn Parkin, president of investment management firm Papamarckow Werner Parkin. “Tangible assets tend to maintain their value and even increase in value even as inflation rises.”

Mario Ortelli, managing partner at strategy and M&A advisor Ortelli&Co., echoed Parkin’s view, saying there is clearly a “defensive element” to this trend.

“Tangible assets become more attractive during times of inflation, geopolitical tensions and financial market volatility,” he said in an email. “Branded jewelry acts as a portable store of value.”

“Unlike fashion accessories, which are tied to seasonal cycles, iconic jewelery collections have a much longer product life cycle,” he added. “They often exhibit stronger resale value dynamics than handbags. Their longevity and perceived preservation of capital help explain jewelry’s relative resilience and soft luxury.”

Luca Sorca, Bernstein’s global head of luxury goods, estimated that about a third of the new interest in gold-heavy gemstone jewelry could be tied to investors’ “safe-flight” behavior.

high resale value

The soaring gold price is a contributing factor. Gold, long considered a safe-haven asset, soared to an all-time high of more than $5,100 an ounce in January. Prices have since fallen, but they are still trading at over $4,500 an ounce.

Andrew Brown, founder and CEO of luxury goods resale platform MyGemma, said: “I think it’s clear that with the price of gold rising almost daily, there is a growing perception that jewellery – gold jewellery, diamonds and gemstone jewellery – is being viewed as an investment.”

Christie’s DiSante said record gold prices are motivating some collectors to take the plunge and sell certain items.

Experts say the durability of jewelry on the resale market is part of its appeal. Brown said she often sees customers reselling branded jewelry years after they first purchased it, often at a much better price than a designer handbag that shows signs of wear and tear.

Jewelry has managed to weather the downturn in the luxury goods market and has grown “pretty well” over the past two years, said Caroline Reil, Pictet’s senior investment manager for luxury brand strategy.

Ms. Reil said she has seen consumers move away from “soft luxury” items such as handbags and accessories. At the same time, “hard luxury” products such as watches and fine jewelry are becoming increasingly popular. Mr. Reil attributed the change to the previous strong demand and extremely high prices for handbags due to supply chain disruptions.

Brown said quality concerns are also a headwind.

Auction prices for iconic Hermès handbags have fallen, with the average resale premium for Birkin and Kelly bags dropping from 2.2x in 2022 to 1.4x last November, according to Bernstein research.

“Leather doesn’t have a lot of intrinsic value,” says Ankur Daga, founder and CEO of luxury jewelry e-commerce company Angara. “As the value of gold has increased, people have come to understand more and more that gold is an extremely valuable asset.”

Durability has helped to enhance jewelry’s reputation as a long-term store of value, especially from famous brands such as Cartier, Van Cleef & Arpels, Tiffany, and Bulgari. Brown estimated that these four brands account for about 90% of MyGemma’s jewelry sales.

“Passion investment”

Jewelry also has an emotional element. Parkin calls this a “passion investment” and says consumers are potentially attracted to “an element of prestige.”

Ortelli agreed. He said elements of brand value, craftsmanship and rarity reinforce perceptions of durability and value retention.

“Branded jewelry has historically experienced annual price increases in the mid to high single digits over the long term, depending on the brand and design,” Ortelli said. “Over a period of five to 10 years, owners often sell for more than their original purchase price, as resale is often at a modest discount to current retail prices.”

“Color is trending”

Gold-rich jewelry benefits from the lowest prices created by the metal’s intrinsic value, Ortelli said. “However, exceptional gemstones, especially rare and high-quality sapphires, rubies and emeralds, can command a significant premium for collectors,” he says.

Currently, fashion trends favor colored gemstones, which have emerged as one of the fastest growing jewelry segments.

Lucrezia Bucciarati, jewelery designer and co-creative director of Italian jewelery house Bucciarati, said this is especially true for the Asian market. She explained that using colored stones allows for more creative designs and often appeals to buyers looking for more unique and personal pieces.

Consumers may also be looking for alternatives to diamonds.

“There’s a real shortage of gem-quality materials coming out of the earth,” said Angara’s Daga. He explained that colored gemstones are more difficult to reproduce in the laboratory. Unlike diamonds, a stone’s inclusions, or minerals trapped inside during its formation, give it character and increase the value of colored gemstones.

“No two are exactly the same, and I think that’s what makes them so interesting in today’s market,” DiSante said, likening each one to a work of art. “In a world where lab-grown diamonds are produced, it feels like a conveyor belt… You can’t do that with sapphires, rubies and emeralds.”

Daga said he expects colored gemstones to appreciate faster than gold.

“If you look at Sotheby’s or Christie’s auctions, these gemstones are selling for numbers that no one could have imagined five years ago, and those numbers are only going to increase,” he says. “Color is trending.”

Colored gemstones are selling for two to three times the auction house’s highest price, which Daga said is “very unusual” given that auction houses typically balance low and high bids relatively well.

As a testament to the strength of this trend, Daga estimates that around 15% of engagement rings now feature colored stones, up from 5% a decade ago. It probably became even more popular thanks to celebrities like Kate Middleton, Eva Longoria, Halle Berry, Rita Ora, and Halsey.

This trend is also bringing in younger consumers. By 2025, Millennials and Gen Z will make up 44% of Christie’s luxury buyers, according to DiSante.

If macro uncertainty persists, experts like Reil said they expect jewelry investments to continue. Bucciarati agreed, saying he expects jewelry to continue to grow within luxury goods and surpass soft luxury goods.

However, there are several challenges, including illiquidity, safety concerns, and storage costs. Also, unlike stocks and real estate, jewelry does not generate income for the owner.

“Jewelry should not be considered a financial asset on par with stocks or ETFs; the liquidity, transaction costs and return dispersion are much higher,” Ortelli said.

He added that the long-term outlook for branded fine jewelry is positive but cyclical.

“This category performs best in a supportive macroeconomic environment of increased wealth creation and political stability…if the macroeconomy enters a deep recession, demand will contract,” he wrote.

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

“I think there’s something really romantic about colored stones,” DiSante said. “There’s something really incredible about thinking that it formed in the earth hundreds of thousands of years ago. And when it’s Kashmir sapphire, even though that mine was only mined for 20 years in the early 1900s, there’s a certain romanticism behind it that can’t be replicated.”

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