By Sabrina Escobar
Silver is on track to end the year on a record-breaking tear, an extra challenge for jewelers grappling with tariffs and the repercussions of an enduring rally for gold.
Gold prices have been increasing for the better part of the past two years, fueled by geopolitical uncertainty, a weaker dollar, higher inflation, and expectations for cuts to interest rates. But until this fall, silver was rising more slowly.
Since Oct. 31, however, silver is up 48% compared with gold's 8.5%. Platinum has gained 35%. Silver prices hit a record high in overnight trading before retreating sharply on Monday morning, but the metal continues to hover close to all-time highs.
For jewelers, the volatility adds another layer of complexity to an already difficult year. New tariffs on India -- the world's largest exporter of diamonds -- and the rise in gold prices have already started to affect financial results.
Companies including Signet Jewelers, Cartier parent company Cie. Financière Richemont, and Brilliant Earth all said in recent earnings calls that the gold rush was weighing on margin growth. Richemont Chief Financial Officer Burkhart Grund said in November that a higher gold price was the "biggest downward pressure" on gross margins, pulling them lower by a little more than 2 percentage points in the quarter ended Sept. 30.
Most jewelers are raising prices in response. Signet's average unit retail price rose by 7.7% year over year in its third quarter, an increase that executives said was partially tied to gold price increases.
Signet CEO J.K. Symancyk said the company was expecting to see "a little bit of a drop-off" in sales of gold merchandise units as a result of the price increases, especially for brands that cater to lower or middle-income consumers. Jewelers serving higher-income clientele, such as Richemont, have been better able to pass on the price increases.
"The desirability of gold and its investment also, we believe, impact positively the attractiveness of jewelry," said Richemont CEO Nicolas Bos. But, he added, the volatility of precious metal prices will always affect the company's cost of goods and margins.
To be sure, gold is a more popular metal for jewelry-making than silver is. Gold accounts for a little over half of revenue in the the global jewelry market, according to a market report from Grand View Research. That means fluctuations in gold prices will have a more meaningful effect on company margins than changes in silver prices will.
Indeed, the silver surge will likely hit the industrials sector more than jewelers, given that the metal has become a key component in electronics and solar panels, as Tesla CEO Elon Musk pointed out last week.
But the compounding effect of all metals trending higher could certainly deal another blow to an industry that has been paying more for precious metals for years.
Retailer Brilliant Earth modestly lowered its guidance for annual earnings before interest, taxes, depreciation, and amortization in November. It said its fourth-quarter gross margins would see some impact from gold and platinum spot prices, which have risen about 40% year over year, on average.
And Canadian jeweler Birks Group said in its August annual report that its retail sales and margins could be significantly affected if prices of silver, diamonds, platinum, or gold rose "so significantly" that consumers stopped purchasing them.
Jewelers have yet to pull the alarm on demand. But investors should be listening for sirens anyway.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 29, 2025 15:40 ET (20:40 GMT)
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