According to Metals Focus, US jewelry demand will reach a 12-year high in 2021. Recent data has indicated that consumers, who have extra money and have nothing to spend it on, have chosen to buy jewelry.

Preliminary estimates from the North American jewelry market and analysis from a UK research company said consumption will grow by 140 tons, which is 10% more than in 2019. Anecdotal evidence also suggests that jewelry purchases increased since consumers are unable to spend money on other luxury items such as vacations. They said there may be a massive shift in the market because consumers buy larger items and feel more comfortable purchasing them online.

Jewelry demand recovered not only in North America, but in Europe as well. However, it still lags slightly behind the US.

Surprisingly, the gold market still declined on Monday amid US president Joe Biden's decision to appoint Jerome Powell for second term as Fed chief. He also nominated Lael Brainard as vice president.

Earlier, some analysts said Brainard's appointment will be optimistic for gold.

Powell's decision came at a time when the Federal Reserve is about to begin normalizing monetary policy. The central bank started reducing monthly bond purchases this month, but insisted that now is not the time to raise interest rates.

This decision to not rush a rate hike despite a spike in inflationary pressures is the reason why gold prices rose recently. Inflation reportedly rose 6.2% in October, the largest increase in 31 years.

Although the appointment of Powell provides some continuity in current US monetary policy, some analysts say there is some uncertainty since Biden still has three vacancies to fill.