ROME, Italy: Record-high gold prices are reshaping how jewelry is made in Italy, pushing artisans and manufacturers to redesign everything from pendants to wedding rings as they try to keep products affordable without changing their visual appeal.

Gold prices surged to a fresh record near US$5,600 an ounce this week, more than doubling over the past year as geopolitical tensions and trade jitters drove investors toward the safe-haven metal.

That rally is squeezing Italy's small and medium-sized jewelry workshops, which say clients, including international brands, are increasingly demanding lower-priced pieces at a time when raw material costs are soaring, according to interviews with four independent jewelers in the country's main gold-making hubs.

"The main question that I've heard in the last months is if I can produce something lighter while having the same appearance," said Massimo Lucchetta, owner of Lucchetta 1953, an independent jeweller supplying department stores from Bassano del Grappa near the northeastern city of Vicenza, Italy's premier gold-crafting centre.

Cutting the Weight but Keeping the Shape

Vicenza is one of Italy's three traditional "cities of gold," along with Arezzo in Tuscany and Valenza in Piedmont, and hosts the Vicenzaoro trade fair twice a year, a major global event for jewelry and watchmaking.

In Arezzo, jewelry makers are increasingly relying on machinery that allows them to preserve a piece's shape while reducing the amount of metal used, said Giordana Giordini, owner of independent brand Giordini.

That approach can keep a pendant's size unchanged while halving its weight. "The person is still buying the same idea of what it is," she said from her workshop in Arezzo.

Giordini supplies wholesalers and some retail stores and exports about 90 percent of its production to international markets.

Italy accounted for 11.2 percent of the $130 billion global jewelry market in 2024, according to a study by Mediobanca. More than 6,800 companies operate in Italy's gold, silver, and jewelry industry, employing nearly 34,000 people, the report said.

Smaller Jewelers Feel the Strain

The impact of rising gold prices is being felt across the industry. Cecile Cabanis, finance chief at LVMH, said this week that higher gold prices had weighed on the performance of its watches and jewelry division, which includes brands such as Bulgari and Tiffany.

That is despite the group using hedging tools, including financial derivatives and advanced price negotiations for precious metals, according to its annual report.

Smaller workshops, however, say they cannot afford to hedge due to the costs and risks involved in trading derivatives.

Sharp day-to-day swings in gold and silver prices are passed directly on to consumers, Giordini said. A gold necklace that cost about 300 euros ($358) a few months ago may now be priced at 500 euros.

Giordini added that price volatility can raise costs for businesses like hers by tens of thousands of euros, since raw materials must be paid for upfront.

Valenza-based jeweller Alessia Crivelli, who is also vice president of trade group Confindustria Federorafi, said producers are also trying to recover and reuse scrap metals from their own production lines. Using recycled or resold gold from outside sources is difficult, she said, because certifying its origin can be challenging.

Wedding Rings in Focus

Wedding rings, where gold weight accounts for a large share of the final price, are becoming a key area of price sensitivity, said another Valenza-based producer.

"If brands need a certain price positioning, they ask us in development to pay more attention to the final weight," the producer said, declining to be named due to client confidentiality.

Couples who previously spent around 600 euros on wedding rings may now face prices above 2,000 euros, the producer added.

Still, jewelers say demand for gold is unlikely to fade. "In the end, they pay for gold because they want it to be gold," the producer said.