A TANGLED WEB
The Latest Jewelry Industry News By Maia Adams, Adorn Insight
No one with even a passing interest in global affairs could deny that as turbulent years go, 2016 will be one to remember. It will also be a year in which international politics have had far-reaching, if as yet unpredictable, effects on the jewellery industry. November 8th, in particular, was a game-changer. In the United States, Donald Trump won the US elections. In India, Prime Minister Narendra Modi announced the demonetisation of old Rs500 and Rs1000 notes. Both events led to serious market volatility. Trump’s victory, and speculation over a revived US economy, sent the dollar higher and gold (which typically has an inverse relationship with the dollar) lower.
Modi’s withdrawal from circulation of high value notes – a bid to crack down on black market activities – saw gold prices rise. Concern among speculators is that this may negatively impact a gold jewellery market already struggling in the wake of a 1% excise tax on manufactured gold products that took effect earlier this year. Dissatisfaction at this measure – itself aimed at linking gold with the Goods and Services Tax (GST) set to roll out in April 2017 as India converts to a single market – that local jewellers closed their shops in protest for several weeks.
As they say, however, every cloud has a silver lining. In this case, quite literally. As gold prices have risen in India, and with silver currently exempt from the excise tax, silver jewellery’s popularity is enjoying a boost.
“Culturally, too, there has always been an inherent respect for silver in India,” adds Bhargava Kamath. “This is why a lot of women prefer buying trendier silver jewellery than, say, a branded product which costs the same but is made in gold plated brass.”
Indian designer fashion is not immune to the charms of silver either. As a self-confessed silver obsessive Kiran Uttam Ghosh sent out an AW16/17 collection called ‘Silver’ featuring garments and jewellery (hammered cuffs, statement chokers and dazzling ear-cuffs) in a palette of silvers ranging from polished to antiqued.
Given their sky-high prices, demand for Rubies will always exist. The lifting in October of US trade sanctions on – among other things – ruby and jade imports from Myanmar has caused ripples of excitement among precious gems traders and collectors in America and will, no doubt, do much to boost the visibility of both gems across the industry.
Last, but by no means least, the UK’s exit from Europe has heaped a hefty dose of uneasiness into the already unstable mix. Whilst the weakened pound post-Brexit has boosted international spend on homegrown luxury brands, the forecast for the wider jewellery sector hangs in the balance.