In 2023, prices for rough, unpolished, and uncut stones declined due to changes in consumer behavior in the post-pandemic era. Citing the Zimnisky Global Rough Diamond Index report, CNN People reported avoiding investing in luxury goods. The Zimnisky Index reports that prices have reached their lowest value in the past year. Industry analysts say diamond prices are adjusting to changing consumer tastes, as consumers increasingly prioritize experiences such as dining out and travel over luxury purchases.
Diamond analyst Paul Zimnisky said consumers had extra cash for discretionary spending because spending on food and travel was fairly low during the pandemic. “People had extra money and used it for non-essential purchases.” he said CNN.
Another diamond analyst, Edaan Golan, told the magazine that diamonds are a completely consumer-driven market. “Shopper demand for diamond jewelry influences the price of rough diamonds and, in some cases, retail prices. Retailers spend hundreds of millions of dollars on advertising to drive consumer demand.” he added.
The drop in prices follows two years of record rough diamond sales. From 2021 to 2022, demand for natural diamond jewelry reached an all-time high.
Zimnisky claimed this was a fix.
But just because the price of diamonds has fallen doesn’t mean consumers will be able to buy them cheaper in stores. These prices do not adjust based on short-term market roughness. “Retailers set their prices and they strictly guard their gross margins,” Golan explained.
Diamond retail sales are expected to finally increase over the winter holidays and early 2024. This period includes several holidays, such as Christmas and Valentine’s Day.
But David Johnson, a spokesman for De Beers, one of the world’s largest diamond companies, expects the surge to be small. All experts are closely watching economic indicators in the United States and other large markets.