UNITED STATES March 09 2017 10:03 AM
LONDON (Scrap Register): The amount or intensity of precious metals in jewelry items may decline in the long term due to e-commerce, said Citi Research in a snippet.
Light-weighting is a prominent trend within the wider jewelry industry as ‘wearability over purity’ forms a greater part of the consumer mindshare, said analysts at Citi Research.
Moreover, the target age-group has expanded to cater to a younger demographic, who typically favor economical and less formal varieties of jewelry. These factors have and likely should continue to have a direct negative impact on physical metal demand,
This declining demand could result in a build-up of refined metal at fabricators. Still, Citi said, the impact on prices “should be limited” although “moderately price negative for gold and silver in the near term.”
Market prices are typically governed by factors such as interest rates and the U.S. dollar, the bank said. Also, “given the large number of people with rising income levels in India and China, we also reckon that, in the long term, growing jewelry sales could counter any demand destruction.”