Is Jewelry a Good Investment with the Volatility We See in the Market in 2025?

Is Jewelry a Good Investment with the Volatility We See in the Market in 2025?

The precious metals market in 2025 has been nothing short of extraordinary. Gold prices have climbed above $4,300 per ounce at their peak, while silver has posted a stunning 67% year-to-date gain through November 6, eclipsing gold’s 52% rise[3]. For anyone considering jewelry as an investment, these numbers might seem incredibly attractive. But the reality is far more nuanced than the headlines suggest. Understanding whether jewelry makes sense as an investment requires looking at the actual market conditions, the types of jewelry available, and what your personal financial situation looks like.

The Precious Metals Boom of 2025

To understand jewelry as an investment, you first need to understand what’s driving the precious metals market right now. The year 2025 has seen year-to-date gains in gold surpass 55% through October, establishing new benchmarks for both institutional and retail investor interest[1]. This isn’t just retail investors getting excited about shiny objects. Major banks are targeting gold prices around $5,000 per ounce, and central banks around the world have been significant buyers. The Federal Reserve cut rates by 25 basis points in September, and analysts expect further cuts, which typically drives precious metal prices higher[4].

The fundamental reason precious metals are performing so well comes down to several factors working together. Real interest rates, which measure the interest rate minus the inflation rate, have become less attractive compared to non-interest-earning assets like gold and silver. When real interest rates are low or negative, investors naturally gravitate toward precious metals as a store of value. Additionally, geopolitical tensions and tariff policies have created economic uncertainty, pushing investors toward safe haven assets[4].

Silver’s performance has been particularly remarkable. The silver market is on course for its fifth successive structural market deficit in 2025[3]. This means global demand exceeds global supply by a significant margin. Global silver demand is expected to drop by 4% year-over-year to 1.12 billion ounces in 2025, but supply is only rising by 1%, creating a deficit estimated at 95 million ounces[3]. This supply-demand imbalance has helped push silver prices to record highs.

Gold and Silver Jewelry as Investment

Now here’s where things get interesting for jewelry specifically. Silver jewelry and silverware are expected to decline by 4% and 11% respectively in 2025[3]. This decline largely reflects weakness in India, where the rupee silver price has been trading at record highs, making jewelry purchases less affordable for consumers. Bar and coin demand for silver is forecast to decline by 4% to a seven-year low of 182 million ounces[3].

This tells you something important: even though silver prices are soaring, actual jewelry demand is falling. People are not rushing out to buy silver jewelry as an investment. They’re either unable to afford it at current prices, or they’re choosing other forms of silver investment like bars and coins.

Gold jewelry demand shows a different pattern. US gold demand rose 58% year-over-year to 186 tons in Q3 2025, with robust investment flows into gold-backed ETFs driving much of this growth[5]. However, this surge is primarily coming from investment products like ETFs, not from traditional jewelry purchases. The average quarterly gold price reached a record $3,456.54 per ounce, up 40% year-over-year[5].

The Volatility Problem

Here’s the critical issue that makes jewelry a complicated investment in 2025: volatility. Gold price forecasts for 2025 suggest continued volatility around 15-25% annually[1]. This means the price of gold and silver can swing wildly throughout the year. For comparison, the S&P 500 increased by only 14% in 2025[3], and that’s considered a strong year for stocks.

When you buy jewelry as an investment, you’re not just buying the metal. You’re also paying for craftsmanship, design, and the jeweler’s markup. A typical jewelry piece might contain 50-70% of its retail price in actual precious metal value, with the rest going to labor, design, and profit margins. This means if you buy a gold necklace for $1,000, perhaps only $500-700 of that is actual gold value.

Now imagine gold prices drop 20% in a year due to market volatility. Your $1,000 necklace might now contain only $400-560 worth of gold. But you won’t be able to sell it for $800. You’ll likely get offered significantly less because the jeweler who buys it back needs to account for their own costs and profit margin. You could easily lose 30-40% of your investment in a volatile market downturn.

The Dual Utility Advantage

There is one genuine advantage to jewelry that distinguishes it from other precious metal investments: dual utility. Silver jewelry provides utility as both an investment and a wearable asset[2]. If you buy a gold or silver ring, necklace, or bracelet, you can actually wear it and enjoy it while holding it as an investment. This is different from buying gold bars or coins, which just sit in a safe.

This dual utility means you’re not purely speculating on metal prices. You’re getting personal enjoyment from the piece. If the price of gold drops 20%, you haven’t lost money in the sense that you still have a beautiful piece of jewelry you can wear. The psychological impact of a loss is reduced because you’re getting value beyond just the metal content.

However, this advantage only applies if you actually like the jewelry and will wear it. If you’re buying jewelry purely as an investment with no intention of wearing it, you’re better off buying bars, coins, or ETFs. You’ll have lower markups and easier liquidity.

Investment Demand and Market Trends

Investment demand for precious metals is expected to increase approximately 14% in 2025, matching the surge experienced throughout the previous year[1]. This surge is coming from multiple investor categories, including sovereign wealth funds, pension systems, and family offices reassessing portfolio allocations. However, most of this investment demand is flowing into institutional products like ETFs and bars, not retail jewelry.

The drivers behind this sustained investment demand include portfolio diversification requirements. Modern portfolio theory suggests higher precious metals allocations during periods of increased correlation among traditional assets[1]. When stocks, bonds, and other traditional investments all move together, precious metals provide valuable diversification.

For moderate risk investors, financial advisors typically recommend 5-8% gold and 3-5% silver allocations[4]. For aggressive investors, the recommendation goes up to 6-10% gold and 3-6% silver[4]. These allocations are usually achieved through ETFs, bars,