Singapore jewellers keep shining amid gold’s record rally – even as margins thin

[SINGAPORE] Record-high gold prices may be squeezing margins and prompting caution among shoppers, but they have also burnished the yellow metal’s status as a safe-haven investment – a dynamic that is keeping jewellery retailers on their toes.

To sustain demand and protect margins in this high-price environment, jewellers are investing in manufacturing efficiency, launching entry-level products, and tightening supply-chain strategies.

Despite the mixed impact, Lee Hwa Jewellery’s flagship store in Ion Orchard continues to draw a steady stream of customers, according to parent company Aspial Lifestyle.

“Traffic in-store has remained pretty much the same,” said Aspial Lifestyle’s chief executive Kean Ng. The Catalist-listed group also owns Goldheart Jewelry and Niessing.

Ng acknowledged that rising gold prices have a mixed effect on jewellery sales. On one hand, they compress profit margins and prompt greater caution among price-sensitive shoppers. On the other, they enhance gold’s appeal as a valuable asset, drawing interest from customers with an investment mindset.

After surging 26 per cent in 2024, gold prices continued to reach record highs early this year – rising more than 17 per cent in the year to date to hit US$3,084.52 an ounce as at 4.30 pm on Friday (Apr 4).

Singapore retailers saw steady growth in gold jewellery sales last year. Ng noted that Lee Hwa and Goldheart outlets across the city-state hit double-digit percentage growth year on year. This robust pace continued into the first two months of 2025, he added.

For the full year ended Dec 31, 2024, Aspial Lifestyle’s jewellery and branded-merchandise sales jumped 25.4 per cent to S$511.1 million. In the second half of FY2024 alone, sales growth soared by more than 40 per cent.

The group also owns investment platform BigFundr, and two pawnshop chains – Maxi-Cash in Singapore and Dr Pajak in Malaysia.

Ng noted that gold pieces now account for a substantial portion of overall jewellery sales. “This performance has been supported by sustained consumer demand, the enduring value of gold, and our strategic focus on product innovation and market engagement.”

Gold’s silver lining

Other local retailers such as Risis and SK Jewellery also saw double-digit growth in gold sales in 2024, with the momentum carrying into this year.

While higher gold prices have led to some hesitation in purchases, retailers say consumer confidence in the precious metal remains strong.

“When prices rise, some consumers may delay purchases, slowing demand, but others see gold as a stable investment, driving interest in certain segments,” said a Risis spokesperson.

The company added that for “accessible luxury” brands such as Risis, higher gold prices present an opportunity to attract customers looking for better value.

A spokesperson for SK Jewellery pointed out that gold remains “a preferred choice for milestone purchases, gifting and investment” – reinforcing its enduring appeal despite the price surge.

The company also noted the rise of discretionary spending, as well as more customers embracing the “buy now or pay more later” mentality.

Margin squeeze

The spokesperson acknowledged that with the sector having traditionally thin margins, the rising cost of gold does put further pressure on profitability.

The company has been investing in manufacturing technology to optimise materials usage to drive demand and sustain margins in the high-price environment.

SK Jewellery has also introduced entry-level gold pieces starting at 0.1 gram that are priced within a double-digit range, to drive volume-based sales among younger buyers looking to invest in gold without high entry barriers.

Risis believes that to sustain demand, it is vital to have a pipeline of launches for new jewellery collections. Its spokesperson added that it is also important to expand overseas, optimise production processes and include “safety stock” in the supply chain to average out the impact of price hikes.

Gold jewellery makers have thus turned to supply-chain management to manage the surge in costs.

Aspial Lifestyle’s Ng noted that retailers will enjoy temporarily higher margins as they dip into existing inventory when retail prices rise in tandem with gold prices.

Over time, however, after the inventory is depleted, it will cost more for gold jewellery makers to replenish their stock, leading to falling margins.

This makes it crucial to practise inventory planning, procurement optimisation and striking the right balance in product mix.