Jewellery manufacturers are adjusting strategies to navigate challenging business conditions stemming from soaring gold prices and cautious buyer spending. The escalating Middle East conflict is also exacerbating an already difficult trading environment. 

Hong Kong manufacturer Ally Jewellery has been directly affected by the US-Iran war.  Business with the Middle East, which accounts for around 60 per cent of the company’s sales, has nearly ground to a halt. “Clients are unable to attend the Hong Kong International Jewellery Show, and we cannot ship orders. Everything is on hold,” Director Issac So said.

Overall sales have also been falling since November 2025 due to high gold prices and weaker market appetite for luxury goods. So is thus adopting a conservative outlook for 2026.

Shifting market habits

The company offers diamond and coloured gemstone jewellery for everyday wear. So remarked, “Smaller items move faster than larger pieces. My clients prefer more accessible price points for their customers who seek elegant diamond pieces that are not too elaborate.”

He observed that retailers are moving away from traditional inventory stockpiling in favour of on-demand sourcing. “A US$10,000 budget does not stretch as far anymore, so buyers are being incredibly selective,” he explained.

Diamond jewellery manufacturer Valerie & Co Ltd faces a similar challenge. Volatile gold prices have put a damper on the company’s sales. The first two months of 2026 saw a year-on-year decrease of over 30 per cent with “buyers being extremely cautious,” said Director Fion Wong.

While consumer confidence remains fragile, Wong believes the market will gradually adapt to prevailing gold prices. 

Geopolitical impact

Valerie & Co’s main markets are the US and Southeast Asia, particularly Indonesia and the Philippines. While its Middle East business is smaller in scale, consumer confidence in jewellery purchases are often affected by escalating economic or geopolitical risks, said Wong.

The month of March is however traditionally a softer period for Middle East trade due to Ramadan. “Some clients had already decided to skip the March show. This, alongside the ongoing conflict, has resulted in a significant absence of Middle East buyers this season,” Wong said.

Meanwhile, Ararat Jewellery of Türkiye, which manufactures diamond and coloured gemstone jewellery, is staying competitive amid high gold prices through innovative, modern designs. This includes a hollow gold collection featuring lightweight yet striking pieces, which caters to customers seeking chunky looks without hefty price tags.

Export Sales Manager Arden Erkol highlighted pricing sweet points between US$250 and US$2,000 for wholesale buyers.

Europe is Ararat's primary market, alongside the US and the Middle East. “European sales fell last year due to US tariffs, high gold prices and economic uncertainties,” he said. 

Business with the Middle East, traditionally a strong market for Ararat, has also slowed down considerably due to ongoing conflicts, travel restrictions and shipping disruptions. “If we cannot ship goods, it impacts our business greatly. We hope the situation resolves soon,” Erkol noted.

While the company will remain cautious amid prevailing economic uncertainties, it will continue to expand its international presence to connect with new buyers across Asia and other regions, he added.
 

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