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Record gold prices take shine off London jewellers

Prices of gold have surged to record-highs, hitting businesses - and customers - in east London's Green Street
Prices of gold have surged to record-highs, hitting businesses - and customers - in east London's Green Street - Copyright GETTY IMAGES NORTH AMERICA/AFP/File JUSTIN SULLIVAN
Prices of gold have surged to record-highs, hitting businesses - and customers - in east London's Green Street - Copyright GETTY IMAGES NORTH AMERICA/AFP/File JUSTIN SULLIVAN

Surrounded by glass-fronted display cabinets filled with shimmering gold bracelets and necklaces at London’s Pakeeza Jewellers store, manager Zahid Khan laments the impact of record-high prices of the precious metal.

“People are obviously buying not as much as before,” Khan told AFP as his sales staff weighed gold necklaces and tapped into calculators, adding there had been a “big increase” in prices.

Pakeeza is located in east London’s Green Street jewellery quarter, a popular destination among the Asian community, while nearby shops also sell traditional clothing like abayas and saris.

Gold products, also including rings and other trinkets, are a traditional gift for births, weddings and other family celebrations, because the precious metal is regarded as an inflation-proof investment that will stand the test of time.

Yet the recent spike in gold prices — driven by haven demand amid geopolitical tensions, and the prospect of US interest rate cuts which weighs on the dollar — has impacted the jewellery market.

– Shock to system –

“When you see rapid jumps in gold and things like that, yes, there’s a shock to the system,” said Vikram Santilal, owner of Jeram Jewellers.

“So the quantity has gone down but budgets have gone up,” he told AFP.

A few years ago, customers could buy 200 grams (seven ounces) of gold for £2,000 ($2,500) — but now they buy only 100 grams and it will cost between £6,000 and £8,000.

“The high prices kind of deterred me from buying, and I have been saving quite a while,” said customer Mariam Lunat, 57, who had just purchased gold bangles that she will give to her daughters as wedding gifts.

“I bought less quantity. Yes, I would have liked to buy… two each, but I’ve only bought one each.”

The gold price has jumped 13 percent since the start of 2024 and in mid-April it set a record of $2,431.52 per ounce, which equates to about 30 grams.

For jewellers, the worst aspect is price volatility because customers track the market and wait for prices to drop before they go shopping.

– Price knowledge –

Khan added that most Green Street jewellers are “working daily” to calculate their own product prices based upon the morning gold-price fix published by industry body the London Bullion Market Association.

This pricing system is essential to the global trade of jewellery, particularly in the world’s two biggest markets: China and India.

“It’s quite normal for an average Asian family to know what the gold price is today… It’s like finding out how much is a litre of petrol,” explained Santilal at Jeram Jewellers. 

“Everybody knows that, because if you’ve got a car, you know what a litre goes for. An average Asian family actually knows what the gold price is. So they’ll discuss these things in social circles.”

Total gold demand dropped five percent in the first quarter year-on-year as it became too expensive for some, according to data from the World Gold Council. Demand for jewellery declined two percent.

Green Street stores specialise in 22-carat gold products, giving each product a shiny distinctive golden hue.

This high concentration leaves jewellers exposed to daily fluctuations in the market of the precious commodity, which accounts for 75 percent of the retail price.

That is in marked contrast to classic luxury brands like Boucheron, Cartier and Van Cleef, where prestige has much more of an influence.

– Hidden gem –

Green Street’s clientele mostly comprise people whose families come from Afghanistan, Bangladesh, India and Pakistan, as well as nations in the Middle East.

PureJewels, another shop on Green Street, specialises in more top-end products that have relatively high design and manufacturing costs.

Boss Jayant Raniga tweaks his prices each month because his brand of products are less exposed to the gold market.

“We were getting a bit worried in April when the price did hit that peak… but overall customers were appreciative of the stability we were providing as a brand. 

“And it didn’t really affect our overall volume.”

“Green Street has become the destination shopping for customers who are wanting to do their wedding shopping of South Asian style,” he told AFP, adding it was a “hidden gem” of the British capital.

Written By

With 2,400 staff representing 100 different nationalities, AFP covers the world as a leading global news agency. AFP provides fast, comprehensive and verified coverage of the issues affecting our daily lives.

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