Australian jewellers forced to cap quotes as ‘insane’ gold price crushes margins

Australian jewellers have a new daily routine of checking the gold price, as “really insane” price rises are crushing margins.

In an unprecedented move, the rapidly changing gold price has forced jewellers to give customers just two weeks to accept quotes on expensive items that often cost Aussies thousands.

The Cut Jewellery founder and director Talitha Cummins told NewsWire that jewellers were “scratching their heads” and adjusting prices.

“We have to price sensibly but the gold price is just eating into the margin,” she said,

“We have to put at the bottom of our quotations this is valid for two weeks because (the price of gold) is just changing so dramatically.

“We’ve never done that before, my uncle has never done that before and he has been in the business for 55 years.”

Ms Cummins said jewellers were constantly checking the ASX, as rapid price fluctuations could add hundreds or even thousands of dollars to the cost of a piece between quote and delivery, squeezing margins rather than boosting them.

“We’ve adjusted our prices for gold chains three times in the last four months,” she said.

“There was a case where we ordered a really heavy tennis necklace and mount from Italy.

“By the time we placed the order, we received the mount about nine weeks later. The jeweller’s charge at the end because they are not stupid … the necklace had gone up $400 in that time.

“That comes out of our pocket, we can’t go back to the customer and say sorry (you need to pay more).”

Ms Cummins said two weeks before one of the biggest romantic days “we haven’t had a specific Valentine’s Day order as yet”.

“We have a lot of appointments, we are doing a lot of engagement ring appointments, but in terms of Valentine’s Day, we haven’t sold anything,” she said.

Ms Cummins did caveat that her jewellery was not necessarily targeted at Valentine’s Day gifts but said by this point she had usually sold something for the romantic holiday.

“We really noticed it over Christmas and now even more so, but people are buying finer pieces or a pendant without a chain and saving up for the chain at a later date,” she said.

“They are making adjustments.”

According to the World Gold Council, the high price of gold is smashing jewellery production.

Jewellery fabrication dropped 16 per cent in 2025, while jewellery consumption slumped 19 per cent.

Even with the huge falls, 441.5 tonnes of jewellery was still consumed in 2025.

“One of our chains was $2300 last year and now costs me $4500 to make, so it is really insane,” Ms Cummins said.

“That’s a significant difference especially in the current economic environment, so I just think we will see an overall slowing down of buying things or people might take longer to purchase.”

Rapid rise and slide

Gold prices are trading near record highs at the moment, with currency debasement, high share prices, tariffs and other forms of geopolitical uncertainty worrying investors.

On the Australian Day long weekend, the price of gold briefly surpassed $US5000 an ounce for the first time.

Three days later it jumped past $US5600 an ounce.

IG market analyst Tony Sycamore said gold prices soared in late January on geopolitical tensions.

“Market sentiment soured on reports that President Trump is weighing a new round of military strikes against Iran following the failure of preliminary discussions between Washington and Tehran regarding the country’s nuclear program and ballistic capabilities,” he said.

By February 2, gold prices dived 21 per cent in three days to $US4405 before settling around the $US4900 range.

Capital.com senior financial market analyst Kyle Rodda said the announcement of the US Federal Reserve chair also sparked volatility in gold prices.

“The pin prick that popped the bubble came in Asian trade on January 30. Reports hit the market that US President Donald Trump would be nominating former board member Kevin Warsh as the next chairperson of the US Federal Reserve. The news sparked an immediate move in precious metals, vis-a-vis a jump in the US dollar,” he said.

Even with the pullback, gold prices have jumped 70 per cent since January 2025.

GlobalX ETF investment strategist Justin Lin told NewsWire in late January that there were still fundamental reasons why investors were buying gold.

“I believe gold has the structural demand tailwinds and supportive environment to sustain these levels, but a correction can be expected and would likely be healthy and represent a good buying opportunity,” he said.

Mr Lin said strained but largely contained geopolitical and trade tensions would likely continue in 2026 and act as a tailwind for gold.

“It’s now becoming clear that the expected continuation is instead turning into escalation,” he said.

“This shift has the potential to drive a stronger-than-expected safe-haven bid for gold.

“The US’s increasing assertiveness on the global stage may also accelerate the ‘Sell America’ trade which began, but ultimately failed, to meaningfully take hold, last year.”

What should customers do?

According to Ms Cummins, shoppers looking for their next jewellery purchase should be strategic.

“I would still recommend going for high quality, solid pieces and saving up more for it,” she said.

“The fine hollow jewellery isn’t going to last the distance, so we would say buy a little less perhaps but buy quality.”