The COVID-19 pandemic had a significant impact on the global demand for gold, including the demand for gold jewelry. In Quarter 2 of 2020, global gold demand decreased by 11%, while global jewelry demand for gold decreased by 46% year-over-year due to lockdowns and rising gold prices. However, the North American market proved to be more resilient than other regions, with gold jewelry demand falling by only 34% in the United States.
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The jewelry industry in North America is increasingly aware of the importance of responsible sourcing practices, particularly for gold sourcing. Over the past five years, the industry has seen a surge in educational, philanthropic, and market-based initiatives that aim to promote responsible sourcing practices. This growing concern for responsible sourcing reflects the industry’s desire to address the social and environmental impacts of gold mining. The US gold jewelry market faces several challenges, it is not all doom and gloom. There are opportunities to turn things around, including improving branding and telling a compelling story, enhancing the retail experience, and developing more sophisticated marketing campaigns. By focusing on these areas, the industry can reconnect with customers and fuel future growth in this category.
Despite the pandemic’s impact on the global jewelry market, the North American jewelry market’s demand for gold has remained strong. Its resilience throughout the crisis highlights its continued importance as a potential market for the CVCFG program. The growing awareness of responsible sourcing practices in the North American jewelry industry makes it an ideal market for sustainable and ethical gold mining practices.
Gold Demand Has Yet to Recover Fully from COVID-19, Says WGC.
The World Gold Council (WGC) has reported that global demand for gold reached its highest quarterly level in a year during Q2 2021, with central banks and investors increasing their purchases. However, the WGC stated that the demand for gold jewelry is still struggling to recover from the impact of the COVID-19 pandemic. As a result, the total gold usage during the first half of 2021 was lower than any first half since 2008.
In 2020, the spread of the novel coronavirus led to a significant drop in demand from both central banks and jewelers, which was offset by investors in Europe and the US, seeking a safe haven for their wealth. These investors stockpiled gold, causing prices to briefly surge above $2,000 an ounce. However, the trend declined when economies began to recover.
During Q2 2021, global gold demand was 955.1 tonnes, which was lower than the 960.5 tonnes recorded during the same period in 2020 and the 1,132.1 tonnes in Q2 2019. In the first half of 2021, demand was 1,833.1 tonnes, down from 2,044 tonnes in 2020 and 2,195.5 tonnes in 2019.
The WGC’s report revealed that exchange-traded funds (ETFs) increased their gold stockpiles during Q2 2021, after rapidly reducing them in the two previous quarters. Meanwhile, central banks purchased more gold than they have in any quarter in the last two years. However, demand from jewellers and investors in gold bars and coins was lower in Q2 than in Q1, although it was higher than the demand during Q2 2020.
Despite these trends, the WGC anticipates that global jewelry demand for the full year will remain below pre-pandemic levels, at between 1,600 and 1,800 tonnes. The council also expects demand from investors, in ETFs and bars and coins, to be between 1,250 and 1,400 tonnes for the year, down from 2020 but in line with the average over the last decade.
Supply and production are critical factors that affect the availability and accessibility of responsible ASM gold in the North American gold jewelry market. In a recent study, participants from various categories, including SMEs, Designer-Makers, and Luxury brands, highlighted the unavailability and delayed supply of responsible ASM gold as a significant barrier.
Businesses that rely on customer relationships and branding tied to responsible products face the risk of losing sales and tarnishing their brand image when they cannot deliver the product due to delayed shipping. The lack of certified casting centers and the inability to access the material in the required form or alloy are also barriers for Designer-Makers and SMEs. In some cases, the certified ASM gold needed was completely unavailable from the respondent’s typical supplier.
The study suggests that a minimum export volume of two kilos of gold is necessary for manufacturers to make purchasing ASM gold from the DRC commercially viable. However, maintaining separate gold flow, transportation, and documentation of the process are key expenses to consider, making it a short-term risk management requirement. Nevertheless, the long-term aspiration is to integrate gold from the DRC into other gold provenances sourced by the company.
Risk management and due diligence are crucial in the jewelry industry, particularly in evaluating and monitoring supply chains. Participants in the SME and Designer-Maker categories tend to rely on informal approaches to supplier evaluation or trust the legitimacy of the certifying body or supplier of the gold to provide assurances on due diligence. However, licensing and reporting processes of artisanal gold programs can be daunting, overwhelming, and difficult to fulfill, making them a barrier to engagement.
The precious metals supply chain
The precious metals supply chain has shaped our modern world by generating vast riches, strengthening the global economy, and shaping civilizations. One of the most famous examples is the California Gold Rush in 1848, which brought over 300,000 prospectors to California in search of riches. Today, the modern gold supply chain can be broken down into eight stages: miner, refinery, mint, transport, wholesaler, brokerage, depository/bank, and retail investor. Gold miners retrieve gold in two ways, ore deposits and alluvial deposits, and send semi-pure bars of gold to refiners. Refining is the chemical process of removing impurities from mined or recycled material, and refiners use several methods to extract pure gold content. Government mints produce currency and precious metals products such as collectible coins and bullion bars, while wholesalers acquire large quantities of metal from government mints and sell them to brokerage firms. Precious metals traverse the globe via plane, train, and armored truck with strict security protocols. Brokerage firms do business directly with retail investors, creating relationships with wholesalers and acquiring specific products when clients request them. The modern gold supply chain has continued to thrive, with gold mining employing more than 2 million people worldwide and providing a lifeblood of economic activity in remote geographies. As such, the supply chain remains a crucial part of the global economy and continues to shape the world we live in today.
Top 20 North American jewelry retail chains.
| Rank | Company Name | Headquarters | Year Founded | Number of Stores | Website |
|---|---|---|---|---|---|
| 1 | Signet Jewelers | Hamilton, Bermuda | 1949 | 3,300+ | www.signetjewelers.com |
| 2 | Tiffany & Co. | New York, NY | 1837 | 320+ | www.tiffany.com |
| 3 | Zales | Irving, TX | 1924 | 700+ | www.zales.com |
| 4 | Jared | Akron, OH | 1993 | 250+ | www.jared.com |
| 5 | Kay Jewelers | Akron, OH | 1916 | 1,000+ | www.kay.com |
| 6 | Helzberg Diamonds | North Kansas City, MO | 1915 | 210+ | www.helzberg.com |
| 7 | Pandora | Baltimore, MD | 1982 | 1,300+ | www.pandora.net |
| 8 | James Avery Artisan Jewelry | Kerrville, TX | 1954 | 80+ | www.jamesavery.com |
| 9 | Alex and Ani | Cranston, RI | 2004 | 90+ | www.alexandani.com |
| 10 | Ben Bridge Jeweler | Seattle, WA | 1912 | 95+ | www.benbridge.com |
| 11 | David Yurman | New York, NY | 1980 | 50+ | www.davidyurman.com |
| 12 | Shane Co. | Centennial, CO | 1971 | 20+ | www.shaneco.com |
| 13 | Harry Ritchie’s Jewelers | Eugene, OR | 1956 | 30+ | www.harryritchies.com |
| 14 | Borsheims | Omaha, NE | 1870 | 1 | www.borsheims.com |
| 15 | Fred Meyer Jewelers | Portland, OR | 1973 | 300+ | www.fredmeyerjewelers.com |
| 16 | Ross-Simons | Cranston, RI | 1952 | 7 | www.ross-simons.com |
| 17 | Robbins Brothers | Azusa, CA | 1921 | 11 | www.robbinsbrothers.com |
| 18 | Reeds Jewelers | Wilmington, NC | 1946 | 50+ | www.reeds.com |
| 19 | Jared Vault | Akron, OH | 1993 | 10+ | www.jaredvault.com |
| 20 | Bailey Banks & Biddle | Houston, TX | 1832 | 15+ | www.baileybanksandbiddle.com |
Signet Jewelers
Signet Jewelers is a specialty jewelry retailer that operates in the United States, Canada, and the United Kingdom. The company was founded in 1950 and is headquartered in Akron, Ohio. Signet Jewelers is the world’s largest retailer of diamond jewelry, with brands such as Zales, Kay Jewelers, Jared, and James Allen.
Signet Jewelers operates approximately 2,900 stores and employs over 30,000 people. The company’s stores offer a wide range of jewelry, including engagement rings, wedding bands, necklaces, bracelets, and earrings. Signet Jewelers also offers jewelry repair services and financing options for customers.
In recent years, Signet Jewelers has faced several challenges, including declining sales and a high-profile sexual harassment scandal. The company has implemented several initiatives to improve its performance, including closing underperforming stores and focusing on digital sales. Despite these challenges, Signet Jewelers remains a major player in the jewelry industry and continues to expand its operations in the United States and internationally.
Tiffany & Co.
Tiffany & Co. is an American luxury jewelry and specialty retailer. The company was founded in 1837 by Charles Lewis Tiffany and is headquartered in New York City. Tiffany & Co. is well-known for its high-end jewelry, including engagement rings, necklaces, bracelets, and earrings, as well as its signature blue box packaging.
Tiffany & Co. operates approximately 300 stores worldwide, including locations in the United States, Canada, Europe, Asia, and Australia. The company’s stores offer a range of luxury goods, including jewelry, watches, home and accessories, and fragrances.
In November 2020, Tiffany & Co. was acquired by the French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton in a $16.2 billion deal. Despite this change in ownership, Tiffany & Co. continues to operate as an independent brand under the LVMH umbrella.
Tiffany & Co. is known for its commitment to responsible and sustainable sourcing practices. The company has established the Tiffany & Co. Foundation to support environmental conservation and is a member of the Responsible Jewellery Council.
Zales.
Zales is an American jewelry retailer that was founded in 1924 in Wichita Falls, Texas. Today, Zales is headquartered in Irving, Texas and operates approximately 700 stores throughout the United States and Puerto Rico. This company is known for its wide range of jewelry offerings, including engagement rings, wedding bands, necklaces, bracelets, earrings, and watches. The company also offers custom jewelry design services, as well as jewelry repair and cleaning.
Zales has a strong online presence, with a comprehensive e-commerce platform that allows customers to browse and purchase jewelry from the comfort of their own homes. The company also offers a range of financing options to make it easier for customers to afford their dream pieces.
In addition to its own brand, Zales also offers a number of other well-known jewelry brands, including Vera Wang Love, Neil Lane Bridal, and Enchanted Disney Fine Jewelry. The company is known for its affordable prices and frequent sales and promotions, making it a popular destination for customers looking for high-quality jewelry at reasonable prices.
Zales is committed to responsible and sustainable sourcing practices, and has established partnerships with organizations such as the Responsible Jewellery Council and Ethical Making Resource to ensure that its jewelry is ethically sourced and produced. The company also has a strong commitment to corporate social responsibility, supporting a number of charitable causes and initiatives through its Zales Foundation.
Jared.
Jared is a jewelry retailer that was founded in 1993 in Akron, Ohio. Today, Jared is headquartered in Irving, Texas and operates approximately 250 stores throughout the United States.
Jared is known for its extensive selection of jewelry offerings, including engagement rings, wedding bands, necklaces, bracelets, earrings, and watches. The company also offers a range of services, including jewelry repair and cleaning, as well as custom design services.
Jared is part of the Signet Jewelers family of brands, which also includes Zales, Kay Jewelers, and others. As a result, Jared offers a number of well-known jewelry brands, including Neil Lane Bridal, Vera Wang Love, and The Leo Diamond.
In addition to its brick-and-mortar stores, Jared has a strong online presence, with a comprehensive e-commerce platform that allows customers to browse and purchase jewelry from the comfort of their own homes. The company also offers a range of financing options to make it easier for customers to afford their dream pieces.
Jared is committed to responsible and sustainable sourcing practices, and has established partnerships with organizations such as the Responsible Jewellery Council and Ethical Making Resource to ensure that its jewelry is ethically sourced and produced. The company also has a strong commitment to corporate social responsibility, supporting a number of charitable causes and initiatives through its Jared Foundation.
Kay Jewelers.
Kay Jewelers is a jewelry retailer that was founded in 1916 in Reading, Pennsylvania. Today, Kay Jewelers is headquartered in Akron, Ohio and operates approximately 1,200 stores throughout the United States and Puerto Rico.
Kay Jewelers is known for its wide range of jewelry offerings, including engagement rings, wedding bands, necklaces, bracelets, earrings, and watches. The company also offers custom jewelry design services, as well as jewelry repair and cleaning.
As part of the Signet Jewelers family of brands, Kay Jewelers offers a number of well-known jewelry brands, including Neil Lane Bridal, Vera Wang Love, and The Leo Diamond. The company is also known for its frequent sales and promotions, making it a popular destination for customers looking for high-quality jewelry at affordable prices.
Kay Jewelers has a strong online presence, with a comprehensive e-commerce platform that allows customers to browse and purchase jewelry from the comfort of their own homes. The company also offers a range of financing options to make it easier for customers to afford their dream pieces.
Kay Jewelers is committed to responsible and sustainable sourcing practices, and has established partnerships with organizations such as the Responsible Jewellery Council and Ethical Making Resource to ensure that its jewelry is ethically sourced and produced. The company also has a strong commitment to corporate social responsibility, supporting a number of charitable causes and initiatives through its Kay Jewelers Foundation.
Overall, Kay Jewelers is known for its extensive selection of jewelry offerings, affordable prices, and commitment to responsible business practices. With its combination of traditional brick-and-mortar stores and online shopping options, Kay Jewelers is a popular destination for customers looking for high-quality jewelry for any occasion.
Helzberg Diamonds.
Helzberg Diamonds is a jewelry retailer based in the United States. The company was founded in 1915 and is headquartered in North Kansas City, Missouri. Helzberg Diamonds operates over 200 retail stores in the United States, and also offers online sales through their website.
Helzberg Diamonds specializes in diamond jewelry, including engagement rings, wedding bands, and other fine jewelry. They also offer a variety of services, including jewelry repair, resizing, and cleaning. Additionally, Helzberg Diamonds offers a credit card program that allows customers to finance their purchases.
Helzberg Diamonds is known for its high-quality diamonds and excellent customer service. The company has a long-standing commitment to ethical sourcing, and only sells diamonds that have been certified as conflict-free. They are also a member of the Responsible Jewellery Council, which works to promote responsible business practices in the jewelry industry.
The US gold jewelry market used to be a lot bigger than it is today.
In 2001, demand peaked at 389t, and in value terms, consumption has barely changed since 1995, with price increases just about offsetting volume declines. This lack of growth is even more concerning given the tremendous growth in US retail spending over the same period, making gold jewellery an underperformer. There are several reasons for this decline in demand, including the impact of the 2008 financial crisis, the rise of diamond-set jewellery as a competitor, and increased spending on technology products. To turn this situation around, there are several areas where the industry needs to focus, including improving branding and telling a compelling story, enhancing the retail experience, and developing more sophisticated marketing campaigns.
One of the reasons why the US gold jewellery market has struggled is that it is largely unbranded, unlike the diamond industry, which has created an emotive brand through its Forevermark campaign. Effective branding can support product differentiation and help build meaningful connections with customers. This is particularly important for millennials, a fickle and trend-conscious cohort that many industries find it difficult to attract. Effective branding can help support product differentiation through, for example, responsible sourcing and community development. In a recent report, the Jewelry Board of Trade highlighted transparency and provenance as being marketing opportunities that brands can exploit. If the industry effectively manages the image of gold from “mine to market,” it can grasp the marketing opportunities and fuel future growth in this category.
Enhancing the retail experience is also essential. While online is important, people still seek out ideas and inspiration in stores. Retailers need to provide great customer service in an engaging atmosphere, encouraging potential customers to play and experiment with products. Customers increasingly expect retailers to remember what they buy and want to be able to personalize the jewelry they wear. The effective use of customer data can help achieve this. Looking to the future, millennials are increasingly sourcing luxury fashion ideas and inspiration from online blogs. Jewelry retailers can embrace this to good effect and ensure that gold jewelry is visible and engaging on a range of social channels.
Finally, more sophisticated, and perhaps collaborative, marketing campaigns are needed. For gold jewelry to prosper, it is clear that additional marketing and brand building are essential. Diamond-set jewelry is a key competitor, followed by silver, with platinum a distant third. Creative marketing campaigns, particularly in the diamond category, have been highly effective at gaining market share. Gold jewelry needs to take a leaf out of the diamond industry’s book and create campaigns that engage and connect with customers. By working together and pooling resources, the industry can create campaigns that are more sophisticated and targeted than anything they have achieved before.
Consumer demand and marketing play a significant role in the availability and accessibility of responsible ASM gold in the North American gold jewelry market. Although 58% of those interviewed already source artisanal gold, 30% of participants cited the high cost of artisanal gold as a barrier to purchasing the material, despite their personal preference to support such sources. Moreover, customers prefer recycled gold due to their lack of awareness of artisanally-mined gold and their recognition that recycled gold is the more environmentally sustainable choice.
The study suggests that the lack of customer demand for artisanal gold is due to their limited knowledge of the problems that responsible artisanal gold mining initiatives seek to address, or the risks associated with recycled gold. Moreover, customers often cannot identify significant differences between recycled gold and artisanal gold, leading them to perceive artisanal gold as not meriting the higher cost. Recycled gold, on the other hand, requires less nuance in communication with the customer, as its “green” marketing is more common and easier for the consumer to digest and understand.
In conclusion, the supply and production of responsible ASM gold play a crucial role in the North American gold jewelry market. Businesses that rely on customer relationships and branding tied to responsible products need to address the barriers of unavailability and delayed supply of ASM gold, lack of certified casting centers, and inability to access the material in the required form or alloy. Risk management and due diligence are crucial in evaluating and monitoring supply chains, and systems providing the same assurances of social and environmental risks management with less obligation on the part of jewelers and casters might be more accessible. Finally, the lack of customer demand for artisanal gold highlights the need for education and awareness campaigns to increase knowledge and understanding of responsible ASM gold and its benefits over recycled gold.
Artisanal Gold Sourcing: The Importance of Transparency, Traceability, and Due Diligence
Consumers’ purchasing decisions are increasingly influenced by environmental concerns when it comes to jewelry, according to luxury jewelers. In a survey, humanitarian issues and environmental concerns were identified as the top two priorities in gold sourcing, with conflict risks being ranked fifth. Jewelers play an important role in educating customers about the risks of artisanal gold sourcing, and some see the need for multiple standards to be communicated to customers as a potential challenge.
Due diligence, transparency, traceability, and measurable impact are among the requirements of market actors for sourcing artisanal gold. Smaller businesses, in particular, rely on initiatives for guidance on identifying which provenance and impact claims can be made about the material. Reliable communication, trustworthy partners, and educational marketing materials for customers are among the key factors that influence market actors’ willingness to purchase and sell artisanal gold.
Participants in the study also expressed a willingness to work with systems that support continuous improvement, particularly when it comes to mercury mitigation and environmental impact reduction. Credible and trustworthy program partners remain a requirement, however, and third-party assurance may be necessary even if certification is not involved.
Transparency, traceability, and due diligence were found to be essential in ensuring responsible artisanal gold supply chains. There is some confusion among supply chain actors about what these concepts mean in practice, however, and there is a need for education in this area. Jewelers and other stakeholders have a responsibility to ensure that the gold entering their supply chain is sourced responsibly and to take action if it is not.
Understanding the Requirements for Responsibly Sourced ASM Gold from Eastern DRC
The artisanal and small-scale mining (ASM) of gold has been linked to various social, environmental, and health issues. In recognition of this, the responsible sourcing of ASM gold has gained significant attention in the jewelry industry. A study was conducted to investigate the requirements of market actors in North America for sourcing responsibly mined ASM gold from eastern Democratic Republic of Congo (DRC). This article summarizes the findings of the study and highlights the key requirements for responsible sourcing of ASM gold from eastern DRC.
The study found that 26% of the participants would require a certain level of third-party certification of the material or their supplier. However, most respondents did not specify what they understood by ‘certified’ and many believed that responsible sourcing is not possible without certification. All respondents expected to engage with ASM gold sources by applying standards which are visible to them. However, most respondents would accept a standard with built-in continuous improvement, recognizing the challenging context of many ASM gold operations. Few cited the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, most likely due to lack of familiarity with the guidance.
The study also found that 15.3% of the participants are certified under the Responsible Jewellery Council Code of Practices standard. These represent actors in the Luxury and High Street categories. 35% of the participants are not certified by the Responsible Jewellery Council, all representing the Designer-Maker and SME categories. This suggests that requirements related to the RJC standards mostly apply to High Street and Luxury category businesses.
Regarding additional requirements for sourcing responsible ASM gold from eastern DRC, the study found that 38% of the respondents require mechanisms for measuring the social, environmental, and economic impacts, with SMEs expressing the most desire for impact data (22%). The most highly desired impact data areas are mercury mitigation or elimination, local economic benefit, and evidence of fair labor practices. Some participants have previous experience with purchasing gold from the DRC, which likely informed their expectations for detailed impact data. Several respondents noted that they would like open communication on impacts, including setbacks and challenge areas. Fact-based, quantitative reporting is important to establishing trust in the program. While 77% of the participants are willing to engage with a continuous improvement model, most expressed a requirement to receive regular communications on progress with associated data points so that they can understand the impact of their purchases.
The ability to offer artisanal gold at a reasonable price is a key requirement for market actors. The price should be competitive with other artisanal gold initiatives, however some participants expressed that no more than 4% to 10% above spot price would be commercially viable for them. While there is a willingness and expectation to pay more for responsibly sourced artisanal gold, participants noted pre-existing challenges with absorbing the higher cost, suggesting it would be easier if there were more consumer demand for the product.
Finally, the study found that availability of supply and reliability of quick delivery are essential requirements for market actors in all categories. Maintaining engagement with artisanal material is heavily dependent on the availability of the forms and alloys desired by the market actors.
In conclusion, the study highlights the importance of third-party certification, measurable impact data, reasonable price, and availability of supply and reliable delivery for responsible sourcing of ASM gold from eastern DRC. The study also suggests that the requirements related to the RJC standards mostly apply to High Street and Luxury category businesses, while SMEs expressing the most desire for impact data. To establish trust in the program, it is essential to have fact-based, quantitative reporting and open communication on impacts. It is also important to understand that responsible sourcing is a continuous improvement process that requires regular communication on progress with associated data points.