As we step into 2025, the gold market continues to capture attention with its persistently high prices. On January 9th, the spot gold price in London was reported at a remarkable $2663.24 per ounce, marking a modest daily increase of 0.23%. This trend is raising eyebrows and prompting questions about the dynamics sustaining such continual growth.

Looking back at 2024, it becomes evident that the international gold price exhibited an unprecedented trajectory, breaking records consistently throughout the year. From January to December, gold prices soared, creating new high points on approximately 40 occasions, resulting in a near 30% increase for the year. Major gold mining companies like Zijin Mining, Shandong Gold, and Zhaojin Mining thrived during this period, showcasing impressive financial performances alongside climbing stock prices. Many investors reaped substantial profits by trading in gold, as the commodity's value surged.

Under typical expectations, one might assume that surging gold prices would correspondingly invigorate the gold jewelry market. However, an entirely different scenario has unfolded. While the investment-oriented consumers have benefited, regular customers seeking gold jewelry have faced significant hardships amidst rising prices. There exists a paradox: while the gold's investment allure grows, traditional jewelry sectors struggle under the strain of high costs, leading to a fierce winter for gold jewelry businesses.

On one hand, soaring gold prices have made gold jewelry seem exorbitant, prompting many consumers to lament the rising costs. Contrary to what one might expect, gold jewelry prices have been pushed beyond 800 yuan per gram in several localities, yet many gold retailers report disheartening sales figures.

In the world of gold investments, while some individuals thrive, enjoying lucrative returns, others are grappling with grave losses. An example is the experience of Li Jie, a gold store owner who profited significantly, earning two to three hundred thousand yuan thanks to that year's price hikes. According to Li, numerous factors influence gold prices, from Federal Reserve interest rate changes to international turmoil. However, another investor, Wang Ying, experienced disappointment when trying to liquidate her gold jewelry amidst fluctuating market prices, finding that she could not recoup her initial investments.

Recent fiscal reports depict a bleak picture for the industry, especially concerning major players like Chow Tai Fook, whose revenue dropped by 20.4% year-on-year in the first half of the 2025 fiscal year, alongside a staggering 44.4% plunge in net profit. Similarly, another prominent entity, Luk Fook Holdings, reported a 27.2% revenue reduction. Such declines in leading companies contrast sharply with rising gold market prices, suggesting that the expected benefits of high gold prices have not translated into boosted profits for jewelers; instead, they face challenges.

The uphill battle for gold retailers can be illustrated by their decision to reduce physical store presence in response to disappointing sales. This year alone, 414 gold-related businesses closed their doors, with Chow Tai Fook shutting down 180 locations, while others like Chow Sang Sang and Sixi Hu closed 47 and 76 stores, respectively. It’s evident that the divide between gold investment opportunities and traditional jewelry consumption has grown stark.

The paradox of selling gold jewelry amid high gold prices brings us to a critical observation: the notion that rising gold prices inherently lead to increased sales of gold jewelry is a misconception. Investment-minded consumers are now gravitating towards tangible assets like gold bars, which present better long-term value due to their purity and stability. In contrast, the jewelry market often entails additional costs associated with craftsmanship, creating a brand premium.

Previously, when gold prices were lower, consumers perceived jewelry as a more accessible investment, willingly paying a premium for aesthetically pleasing pieces. However, the modern narrative treats gold primarily as a financial asset, dampening the willingness to purchase items that come with a 30% markup for adornment.

In a tangible reflection of this shift, many traditional shoppers, facing inflated prices, are reconsidering their purchases. A consumer named Wang encountered high prices while shopping for a gold necklace as a birthday gift; despite attractive promotions, the costs turned out to be beyond what she had anticipated, leaving her to settle for a smaller bracelet for her daughter instead. Such incidents indicate a broader consumer pattern that may disrupt the gold jewelry market further.

According to the National Bureau of Statistics, the retail sales of gold and silver jewelry in China have been on a downward trajectory, with a 7.8% decrease recorded by September 2024. Additionally, a report from the World Gold Council reveals a decline in the percentage of self-gifting in jewelry purchases, indicating fewer individuals are partaking in non-essential personal adornments.

Now, with the significant increases in gold prices, there is a risk that consumer interest in gold jewelry will continue to fade as well. The cooling sentiment towards gold purchases could consequentially harm the overall health of jewelry businesses.

As we gaze ahead into 2025, the question arises: will gold maintain its bullish streak, or are we witnessing a potential turning point? Contrary to dreaded forecasts, experts from the World Gold Council have indicated a more tempered outlook for gold, recognizing that while the market remains stable, the explosive growth seen in the previous year may not be readily comparable.

At present, gold prices hover around $2600 per ounce, underlining historical highs. Analysts perceive that there is still substantial buying pressure whenever prices teeter around established low points. Looking at broader trends, rising debts and increasing inflation pressures may gradually encourage central banks to explore de-dollarization, creating an underlying push for gold demand.

Furthermore, geopolitical risks persist and continually sway the financial landscape, driving investors toward gold as a safe haven, even amidst improving circumstances in specific regions. Thus, 2025's gold market will be a complex blend of challenges and opportunities, where strategic decision-making could yield profits amidst fluctuating market conditions.

For jewelry enterprises, the key lies in adaptability and timely adjustments to embrace the evolving market dynamics. Forward-thinking businesses may find pathways to thrive, even in the face of soaring gold prices.