Gold jewelry is one of the top three most popular items for women's discretionary spending in the U.S. according to World Gold Council's (WGC) 2008 survey, What Women Want: Global Discretionary Spending Report, conducted by independent research firm, GfK, among 1,068 American women aged 16 to 65. The study was also run in the key gold jewelry markets of India, China, Saudi Arabia, Italy and Turkey.
The global survey, which was last conducted in 2005, examined the attitudes of nearly 7,500 females, aged between 15 and 65, toward luxury items and consumables, exploring their views on product attributes, price and competition for discretionary spend.
The findings of the survey, conducted in the spring, reveal that gold jewelry in the U.S. has continued to maintain its appeal despite a squeeze on women's spending power, a volatile and rising gold price and increased competition from other consumer goods. In the U.S., gold jewelry maintained its position as the third most popular item chosen by a woman spending her discretionary income on herself. It currently ranks below spending on 'short breaks' and 'increasing savings' but above such spending choices as a 'meal at a nice restaurant' or 'beauty/spa treatment.'
Increases in price can have a negative effect on desirability in consumer goods categories; however, in the case of gold, the increase in price has underpinned its intrinsic value. According to the survey results, those who noticed the increasing price over the past 12 months were most likely to agree that the current price reassured them of the value of their gold jewelry. In the U.S., 68 percent of consumers who noticed a price increase said that it reassured them that "What I buy and own is valuable" while 67 percent said "gold jewelry is a good investment."
John Calnon, Managing Director -- Americas, World Gold Council, commented on the survey findings:
"In the context of a rising gold price, which reached new heights in early 2008, it was important that the survey focus on how the gold price may impact consumer attitudes and spending behavior. It is encouraging that gold's price increase has re-emphasized the value of gold as an investment, as well as a fashion item, and has actually made it more desirable. This research has helped us to shape appropriate consumer messaging that will continue to build gold's desirability during turbulent economic times."
The survey, last conducted at a gold price point of US$444/oz -- compared to 2008's average of US$897/oz -- showed that if given around $1,000 to spend, the number of women who would spend it on gold versus other products in 2008 (38%) was similar to the number of women who would spend around US$500 in 2005 (42%). This is evidence that the rising price has not eroded the desirability of gold jewelry for women who have the discretionary spend available to make purchases.
The survey also showed that while the ownership of gold has increased among those interviewed in the U.S., with 94 percent owning gold jewelry compared to 90 percent in 2005, the main competition for consumer discretionary spending does not come from other fine jewelry. Rather, it comes from other "must have" fashion accessories and gadgets such as mobile phones and other personal electronic goods. Ninety-six percent of US women surveyed own mobile phones or personal electronics, up three percent from 2005.
A number of attributes were identified that make gold unique. It has a perceived longevity, purity and value that sets it apart from other luxury goods and a clear differentiation from other precious metals and stones that is derived from its associated and relatively transparent investment value. At the same time, gold's aesthetic qualities are acknowledged as versatile and suitable for everyday wear.
In contrast to gold jewelry, which has clear financial value, other luxury consumables were viewed as having short-term aesthetic appeal and therefore lacked the investment value and the longevity of gold.
