Gold Prices Surge 54%, Jewelers Flock to Diamonds as Consumers Seek Value

Gold prices have risen sharply from last year's festive season, prompting jewellery buyers to consider diamonds as an alternative. Retailers are projecting a 15-20% increase in diamond jewellery sales this festive season. As shoppers seek pieces that offer value while staying within their budgets.

Joyalukkas chairman Joy Alukkas attributes the surge in diamond jewellery sales to the affordability of diamonds, citing the use of lower-caratage gold. The company expects a 20% growth in diamond jewellery sales this festive season. However, intense competition in the retail jewellery space is emerging, with regional players expanding their footprint and entering the equity markets with their IPOs.

Read More: Rupee Gains 96 Paise as RBI Curb Measures Take Effect

Consumers are shifting their approach to jewellery shopping. Opting for lighter pieces as elevated gold prices drive up the cost of traditional ornaments. Anmol Jewellers founder Ishu Datwani notes that diamond jewellery offers a better value proposition, with a look-to-price ratio that is significantly higher.

Customers are now preferring lightweight gold jewellery, opting for 60 grams instead of 100 grams in the past.

Smaller diamonds have become more affordable, making studded jewellery an appealing option for consumers seeking to avoid the higher cost of gold ornaments. Prices of small diamonds are around 25% lower than during the 2025 festive season. Meanwhile, gold prices have climbed 54% over the same period.

Also Read: IIT-B Report Calls for UPI MDR Reduction to 0.08%

Kama Jewelry managing director Colin Shah highlights the shift in consumer preference, particularly in the Rs 10,000-Rs 1 lakh segment. Smaller stones have become popular in this price range, as consumers seek more affordable options.

With gold prices at elevated levels, we expect diamond jewellery to see increased interest this festive season. Kumari Fine Jewellery founder Supriya Kataria attributes the surge to consumers seeking pieces that offer distinctive design, versatility, and flexibility. Kataria expects demand for diamond jewellery to increase by 15-20% this festive season.