Maybe diamonds really are forever.
A new Citigroup report found that despite a broader slowdown in U.S. luxury spending, affluent consumers are showing a marked preference for fine jewelry, CNBC reported.
Based on credit card transaction data from more than 10 million U.S. cardholders, Citi found that while overall spending on high-end goods declined in the first five months of 2025 compared to the same period last year, jewelry sales have surged.
Luxury spending in May 2025 dipped just 1.7 percent year over year, following much sharper drops of 6.8 percent in April and 8.5 percent in March. Amid this decline, jewelry performed stunningly, exceeding the sales of other upscale categories like handbags and ready-to-wear. According to Citigroup’s analysis, luxury jewelry spending increased 10.1 percent in May compared to a year earlier, continuing a monthly growth trend that began in September 2024.
Citi analyst Thomas Chauvet told CNBC that fine jewelry’s surge can be credited to its perceived investment value and sentimental quality.
“When you have $3,000 to spend on luxury, you know, are you going to buy a piece of jewelry or a handbag for the same price?” he said. “Perhaps the piece of jewelry gives you superior intrinsic value given the precious metals content and superior emotional value and meaning.”
Chauvet also noted that coveted jewelers like Cartier have raised prices by less than 5 percent since the start of the year despite the cost of gold appreciating by over 25 percent, further incentivizing high-end jewelry purchases.
Handbag brands, however, have increased prices as much as 30 percent to 40 percent since the pandemic with little to no tangible product improvements, according to Chauvet.
Even though some top-tier jewelry brands lost 2.7 percent of their clientele, the consumers who remained spent 11.7 percent more on average. Jewelry was also the only product type to see an increase in individual customers as well as increases in average spend by customer.
Meanwhile, luxury brands in other sectors, such as Hermès, saw a 0.2 percent increase in consumer spending since 2024.
Chauvet also attributes the general decline of consumer spending, despite fine jewelry’s success, to various political and economic factors in the country. Namely, the weak U.S. dollar, impending resumption of tariffs on global trade, and oil prices amid the Iran-Israel conflict all greatly effect how American consumers are spending their money and where.