● A weaker US currency and falling Treasury yields helped gold bounce back to $3350. However, the rationale against rate cuts was questioned by June’s low consumer confidence, which sparked worries about the labour market and trade policy.

● Despite political pressure, Fed Chair Jerome Powell remained cautious during his second day of testimony, stating that the Fed can control inflation brought on by tariffs but is not yet prepared to lower rates.

● To curtail Tehran’s nuclear program and ease Middle East tensions, US and Iranian officials are scheduled to meet next week. This comes as geopolitical tensions are beginning to ease. Although the ceasefire between Israel and Iran seemed to be holding, questions remained about how long it would last.
Technical Triggers
● If gold prices hold below $3330 (~Rs 97000), they may retrace to $3275 (~Rs 96000). However, it may go towards $3340 (~Rs 99000) if prices continue to rise beyond $3385 (~Rs 98000).

● For the bull trend to continue, prices must maintain the support of $35.50 (~ Rs 105,300). The next downward level, if this support is breached, is $34.50 (~Rs 104,000). Prices may increase to $36.75 (around Rs 107,500) on the upside.

Support and Resistance

Gemfields is set to significantly expand its ruby production with the opening of a new processing plant at its Montepuez mine in Mozambique this September. The facility will triple the site’s ore-processing capacity—from 200 to 600 tonnes per hour—marking a major leap in the miner’s operational scale. Initial ruby production from the new plant is scheduled for August, with full operations launching the following month.

Originally slated for an earlier debut, the opening was delayed due to challenges including transportation disruptions, work permit delays, and security-related and operational issues in the region.

Meanwhile, Gemfields has also restarted open-pit operations at its Kagem emerald mine in Zambia, which had paused mining earlier this year as part of cost-reduction strategies amid a cooling colored gemstone market. The restart begins with two active production zones at the Chama pit, focused on low-waste mining. Depending on market recovery, the company may scale up activity in July, though it does not plan a full return to previous output levels in the near term.

In addition to its mining operations, Gemfields is once again evaluating strategic options for its luxury Fabergé brand, after resolving a rights issue that had temporarily paused such plans. The miner began exploring the sale of Fabergé in December as part of a broader effort to align its portfolio with market trends and shareholder interests.

Together, these moves signal Gemfields’ intention to adapt to shifting market dynamics while reinforcing its leadership in the colored gemstone sector.

Despite challenges in the broader luxury market, the jewelry segment continues to shine, according to a new report by Bain & Company in collaboration with Italian luxury industry group Altagamma. The report outlines a cautious outlook for the personal luxury goods market in 2025, with the most likely scenario forecasting a moderate decline of 2% to 5%.

Three potential trajectories were presented for the year:

1. A moderate contraction of 2%–5% (most likely)
2. A stable scenario ranging from a 2% decline to 2% growth
3. A more severe downturn of 5%–9% in an extended weak market

Following a strong rebound post-COVID, which saw the personal luxury market reach €369 billion ($425 billion) in 2023, the sector contracted slightly by 1% in 2024 to €364 billion ($419.2 billion). Early 2025 data suggests a further softening of 1% to 3% in Q1.

Despite the broader slowdown, the jewelry category remains a bright spot. Consumer appetite for both ultra-luxury pieces and accessible luxury jewelry continues to fuel growth in this segment. Bain notes that while sluggish tourism has affected the European luxury landscape, domestic demand—particularly for fine jewelry—has helped cushion the impact.

Other areas showing strength include experiential luxury, which is increasingly popular with Gen Z buyers seeking more personalized and emotionally meaningful luxury experiences.

However, overall global luxury spending is under pressure. Economic uncertainties, including tariffs in key markets like the US and China, are affecting consumer sentiment. Younger generations are also becoming more discerning, questioning the value and cultural relevance of luxury goods.

Still, there is optimism for the future. Claudia D’Arpizio, senior partner at Bain & Company and global head of its fashion and luxury practice, emphasized the sector’s resilience:

“Although demand is easing in the short term, the luxury sector has consistently demonstrated extraordinary resilience — buoyed by a growing global consumer base and deeply rooted emotional drivers,” she said. “Across generations, motivations tied to self-reward, status, identity, and achievement will continue to sustain the relevance of luxury.”

In short, while the luxury market may contract slightly in 2025, jewelry continues to shine as a key growth driver, supported by emotional value, strong local demand, and enduring consumer engagement.