Cartier
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Luxury jewellery spending soared over 10% in May 2025 across the US, bucking the broader luxury slowdown and signalling a shift in consumer priorities. As handbags and apparel categories continue to struggle, new data suggests shoppers are turning to gold and fine jewellery for their investment value and emotional resonance, leaving flashy logos behind.

According to Citigroup's latest credit card analysis, overall US luxury goods spending declined in early 2025. Yet jewellery has emerged as the sector's most resilient performer, bolstered by rising gold prices, gifting appeal and a growing perception of long-term value.

Jewellery Defies the Luxury Slowdown

Citigroup's retail transaction data shows that while luxury spending fell 6.8% in March and 8.5% in April year-on-year, the May decline narrowed to just 1.7%. Jewellery stood out, climbing 10.1% year-on-year and outperforming all other categories.

This growth wasn't solely driven by high-ticket purchases; it also reflected a broader base of buyers. Unlike leather goods and apparel, which relied on wealthier customers spending more, jewellery attracted new shoppers.

However, even within jewellery, top luxury brands saw a 2.7% drop in the number of individual buyers. Those who stayed, though, spent significantly more — up 11.7% on average.

Handbags Lose Their Shine

Luxury handbags, long considered the entry point to prestige fashion, are losing appeal. Citi analyst Thomas Chauvet attributes this to price fatigue. 'Since the pandemic, handbag prices have climbed 30% to 40%, yet consumers aren't getting more for their money,' he told CNBC.

Chauvet added that many handbag designs now feel repetitive. 'Across top brands, most styles look nearly identical, with little innovation in shapes or detailing.'

While some upcoming autumn/winter collections promise fresh ideas, broader buyer fatigue persists.

Jewellery, by contrast, appeals both emotionally and financially. As Chauvet explained, a shopper with £2,500 to spend may now choose a Cartier bracelet over a designer tote. 'Jewellery offers superior intrinsic value thanks to precious metals, and stronger emotional value since it often marks personal milestones.'

Gold's strong performance reinforces this trend. Prices have surged more than 25% since January 2025. Meanwhile, Cartier has raised prices by under 5%, making its pieces appear relatively good value despite inflation.

This dynamic helps explain why jewellery brands are seeing strong demand, even from cautious consumers.

Luxury Watches Deliver Mixed Results

Luxury watches also performed well, up 14.7% in May year-on-year. Yet the growth appears uneven. Sales of top-tier watch brands dropped 10% in the same month, suggesting momentum is concentrated among specific models or retailers.

Chauvet noted that recent surges in Swiss watch exports may be driven by brands front-loading shipments to the US ahead of a proposed 31% tariff by the Trump administration. 'Retailers are loading up, not necessarily consumers,' he said.

Economic Risks Cloud the Outlook

Despite stronger equity markets in early summer, US consumer sentiment remains fragile. The dollar has fallen 10% year-to-date, eroding Americans' purchasing power abroad.

'We know US consumers feel more confident when the dollar is strong,' Chauvet said. 'Travel and luxury purchases go hand in hand, and that connection is highly currency sensitive.'

With potential new tariffs and geopolitical tensions in the Middle East, analysts warn of more volatility in the second half of 2025. A 90-day tariff pause is nearing its end, raising the risk of further shocks to luxury markets.

A Shift Toward Meaningful Luxury

The latest spending data highlights a clear pivot among luxury shoppers. In an era of economic uncertainty and price fatigue, consumers appear to favour pieces that hold monetary and emotional value.

For now, gold and fine jewellery offer what handbags lack: intrinsic worth, timeless appeal and a tangible connection to personal milestones.