UK's South Asian Jewellers Thrive as Soaring Gold Prices Drive Investment Boom
Economic uncertainty and volatile markets are prompting more people to seek alternative investments, with gold emerging as a preferred safe haven. This trend is driving a significant business boom for South Asian jewellers across the UK, particularly in areas like Leicester's Golden Mile, where shops are experiencing relentless demand.
Economic Drivers and Consumer Behaviour
Sandeep Kanda, owner of Sunny Jewellers on Leicester's Golden Mile, highlights the lack of trust in banks amid global tensions, including actions by figures like Donald Trump. "With everything that's going on in the economy and Donald Trump banging his chest against the world, we're finding there's no trust in the banks because we don't know what's going to happen," Kanda explains. This sentiment is fueling a surge in both buying and selling gold, as customers snap up 22-carat gold bars and coins or sell off unworn jewellery to capitalise on high prices.
Gold prices reached a peak of over $5,000 per ounce in late January, driven by factors such as geopolitical clashes and threats, which led investors to seek stability. Although prices have since retreated to around $4,877, the volatility has not dampened demand. Kanda notes, "By the end of the day we're just knackered. We are seeing a lot of people buying and selling. As the price of gold goes up, we get busy on both sides."
Cultural Significance and Investment Appeal
Gold holds deep cultural importance in South Asian communities, often used in traditions like weddings, where it symbolises good luck and financial security. Pravin Pattni, owner of Minar Jewellers in Tooting, south London, emphasises this dual role: "People do like the idea of buying gold as a means of maintaining cultural traditions. And they know as well, in the back of their mind, that it is a sound investment."
This cultural demand persists despite high prices, with wedding jewellery purchases now ranging from £75,000 to £100,000, up from an average of £25,000 a decade ago. Parul Visram of Ram Jewellers on Leicester's Golden Mile adds, "People do have trust in gold, that they are going to get the value back."
Generational Shifts and Market Dynamics
Younger members of the South Asian diaspora are increasingly investing in lightweight gold pieces or gold bars for everyday wear and savings, while older generations sell heavier, traditional jewellery to support family needs. Jayant Raniga, owner of PureJewels in east London, observes that customers initially react with "shock horror" to high prices but quickly accept them, showing commitment to gold investments.
Pattni shares an example of an elderly customer who sold a gold collection worth £200,000, accumulated since the 1970s when gold was around 40p per gram, to help his grandson buy a house. "That's the beauty of gold," Pattni says. "Anybody who has put any money into gold, they're just laughing because they've made so much more money without having to do anything."
Challenges and Future Outlook
The volatility in gold prices, influenced by factors like Federal Reserve appointments, creates uncertainty for jewellers in timing stock purchases and sales. However, many remain steadfast, with Raniga noting that 22-carat gold's malleability and sheen make it irreplaceable. Additionally, there is growing interest from non-Asian and younger customers in investment gold, broadening the market base.
Gemmologist Vishal Jogiya on Leicester's Golden Mile recounts a father teaching his 10-year-old son about gold investments, highlighting the enduring value passed through generations. "That 10-year-old kid will remember buying this piece of gold. He's been taught the value in investments," Jogiya reflects, underscoring the profound impact of this trend on communities and the economy.
