A ruby necklace was the star of a recent Sotheby’s auction in Paris, where it sold for more than double its high estimate. it surpassed its EUR 300,000 ($322,946) top price to bring in EUR 609,600 ($657,035), according to Sotheby’s. In total, the auction garnered EUR 7.2 million ($7.8 million).

The necklace, featuring a cushion-shaped, 3.12-carat, pigeon’s blood Burmese ruby, took the top spot at the March 26 Fine Jewelry sale.

jewelry auctions are more than just events — they play a pivotal role in defining the value of fine diamonds, gemstones, and jewelry. These auctions not only demonstrate resale trends but also offer a fascinating glimpse into the evolving tastes of collectors and investors around the globe.

Cash transaction curbs hit Hong Kong diamond trade, impacting its competitiveness.

Hong Kong’s jewellery trade shows, historically significant hubs for diamond and gemstone transactions, are undergoing a period of significant transformation. Recent regulatory changes, particularly the elimination of cash transactions for diamond dealers, have fundamentally altered the market dynamics. This analysis examines the impact of these changes, the resulting challenges, and potential future implications for the industry.

Hong Kong has long been a vital center for the global jewellery trade, renowned for its strategic location, established infrastructure, and vibrant trade shows. Historically, the city’s appeal lay in its status as a cash market, facilitating swift and discreet transactions, particularly in diamonds.

Hong Kong’s position as a prominent cash market has been compromised, impacting its competitiveness. This has caused a decrease in some of the revenue that was historically generated at the trade shows. Compounding the challenges posed by regulatory changes is the simultaneous decline in Chinese diamond demand.

The implementation of regulations prohibiting cash transactions for diamond dealers two years ago has significantly disrupted the traditional trading practices. This change has eliminated a key attraction for dealers who relied on the anonymity and speed of cash transactions. This regulatory change was likely implemented to increase transparency, prevent money laundering, and adhere to international financial standards.
Exhibitors are now required to display regulatory certifications, indicating a heightened focus on compliance. The presence of Hong Kong’s Customs and Excise Department representatives at trade shows underscores the government’s commitment to enforcing cash rules. This has increased the level of trust in the market, for legitimate businesses.
Hong Kong’s jewellery trade shows are navigating a period of significant change driven by regulatory adjustments and evolving market dynamics. While the elimination of cash transactions has posed challenges, it also presents an opportunity to strengthen the industry’s integrity and long-term sustainability. By embracing digital innovation, diversifying market focus, and maintaining a strong regulatory framework, Hong Kong can solidify its position as a leading global jewellery trading hub.

• Increased Compliance and Transparency
• Decline in Cash Market Status
• Weakened Chinese Diamond Demand

This external factor further exacerbates the difficulties faced by the Hong Kong jewellery trade.
Challenges and Implications:
• Reduced Transactional Volume:
The elimination of cash transactions may have led to a decrease in the overall volume of transactions at trade shows, as some dealers may have shifted to alternative markets.
• Shift in Market Dynamics:
The industry is adapting to a new era of transparency and compliance, requiring adjustments in business practices and strategies.
• Competitive Pressure:
Hong Kong faces increased competitive pressure from other jewellery trading hubs that may offer more flexible transaction options.

Impact on Small and Medium-Sized Enterprises (SMEs):
Smaller businesses that relied on cash transactions may be disproportionately affected by the regulatory changes.
Need for Digital Adaptation:
The industry must embrace digital transaction methods and technologies to remain competitive.
Potential Future Strategies

Enhancing Digital Infrastructure:
Investing in secure and efficient digital payment systems to facilitate seamless transactions.
Diversifying Market Focus:
Exploring new markets and diversifying product offerings to mitigate the impact of declining Chinese demand.
Strengthening Regulatory Framework:
Maintaining a strong and transparent regulatory framework to build trust and attract reputable businesses.
Promoting Hong Kong’s Strengths:
Highlighting Hong Kong’s strengths, such as its established infrastructure, skilled workforce, and strategic location, to attract international buyers.
Focus on high end goods:
Hong Kong could focus on becoming the high end market for very expensive and rare stones, where the added security and regulations are a positive.

U.S. Enacted Tariffs:

• Steel and Aluminum Products: A 25% tariff was announced on February 10, 2025, and became effective on March 12, 2025.
• Canadian Goods: A 25% tariff was announced on February 1, 2025, and took effect on March 4, 2025. However, on March 6, tariffs on USMCA-compliant goods were delayed until April 2. Additionally, the tariff on potash was reduced to 10%.
• Canadian Oil and Gas: A 10% tariff was announced on February 1, 2025, with implementation delayed until April 2.
• Chinese Goods: An initial 10% tariff was announced on February 1, 2025, effective February 4, 2025. This rate increased to 20% on March 4,2025.
• Mexican Goods: A 25% tax was announced on February 1, 2025, and took effect on March 4, 2025. Tariffs on USMCA-compliant items were pushed back to April 2.

Proposed U.S. Tariffs:

• Reciprocal Tariffs: Announced on February 13, 2025, with implementation expected to begin on April 2.
• European Union Goods: On February 2, 2025, President Trump stated that taxes on European Union goods will be implemented pretty soon
• On March 13, he threatened a 200 percent levy on EU alcohol.
• Digital Service Taxes (DSTs): On February 21, 2025, President Trump directed the U.S. Trade Representative to initiate a Section 302 investigation into DSTs, particularly targeting France, Austria, Italy, Spain, Turkey, and the UK.
• Copper Imports: On February 25, 2025, the Commerce Secretary was directed to initiate a Section 232 investigation into copper imports.
• Timber and Lumber Imports: On March 1, 2025, the Commerce Secretary was directed to initiate a Section 232 investigation into timber and lumber imports.

Foreign Retaliatory Measures:

• Canada: Implemented a 25% tariff on certain U.S. goods effective March 4, 2025. On March 13, 2025, Canada expanded tariffs to include 25% on steel products, aluminium products, and miscellaneous goods.
• China: Imposed a 15% tariff on coal and liquefied natural gas, and a 10% tariff on oil and agricultural machinery, effective February 4, 2025. On March 10, 2025, China expanded tariffs to 10-15% on U.S. meat and agricultural products, suspended U.S. lumber imports, and revoked soybean import licenses for three U.S. firms.
• European Union: Announced planned tariffs on €4.5 billion of U.S. consumer goods, delayed from April 1, and €18 billion of U.S. steel and agricultural products, expected to take effect in mid-April.

Impact of US Tariffs on Bullion Industry

These measures have escalated global trade tensions, leading to increased economic uncertainty and potential impacts on the bullion Industry. TheTrump administration tariffs have significantly impacted the global bullion industry, particularly in terms of supply chains, pricing, and investor sentiment. Here are some key effects:

• Increased Gold and Silver Import Costs – If Trump imposes tariffs on gold imports, especially from the UK (via Bank of England reserves),
• premiums in India and other markets may rise due to supply disruptions. Any tariffs on silver imports could push up costs for industrial users
• and jewellery manufacturers.
• Market Uncertainty and Safe-Haven Demand – Trade war fears and economic uncertainty have historically driven safe-haven demand for gold.
• Investors have increased their bullion holdings as a hedge against currency fluctuations and geopolitical risks.
• Impact on Refining and Trade – Tariffs on dore imports could make refining costlier in major processing hubs like India and Switzerland. If China imposes retaliatory tariffs, it could disrupt gold flow and shift refining operations elsewhere.
• Effect on Bullion Prices and Premiums – Tariffs have distorted pricing, leading to higher premiums in key consuming markets like India and China. Increased import costs have widened the gap between domestic and international gold prices.
• Influence on Central Bank Gold Reserves – If tariffs impact gold trade routes, central banks might adjust their reserve strategies, possibly leading to increased domestic purchases.