Editor’s Note
A significant shift is underway in the luxury goods market. As reported by CCTV Finance, the price of certified diamonds has fallen sharply over the past year, declining by 35-40%. This cooling of the diamond market stands in stark contrast to a concurrent surge in gold prices, highlighting changing consumer preferences and investment strategies. This article explores the factors behind these divergent trends.
According to CCTV Finance, over the past few decades, diamonds have consistently been the darling of the luxury market. However, in the past year, the price of certified diamonds has plummeted by 35% to 40%.
Netizen Xiao Ya told reporters:
Xiao Ya stated:
Xiao Ya explained that purchasing a diamond ring was only to satisfy the sense of ceremony during the wedding, and she didn’t wear it much after marriage.
According to CCTV Finance, Antwerp, Belgium, is known as the “Diamond Capital of Europe.” There is a street famous worldwide for diamonds, home to four diamond exchanges and thousands of diamond wholesalers. A large volume of diamond transactions are completed here annually. Kevin is a diamond wholesaler from India.
Indian diamond wholesaler Kevin:
Additionally, natural diamond prices have also been impacted by lab-grown diamonds. The owner of a high-end diamond jewelry store told reporters that, unlike in the past, over half of customers now choose lab-grown diamonds.
Over the past year, due to sharply rising living costs and consumption downgrades in many European countries, people are no longer picky about the grade of diamond rings. Lab-grown diamonds have rapidly captured market share from natural diamonds.
Wilfried Verhulst, President of the Antwerp Diamond Exchange Federation:
According to data compiled by the global jewelry industry analysis agency Tenoris, the market share of lab-grown diamonds has been continuously rising since 2021. By July this year, the market share had reached 49.9%, very close to the 50% threshold, and is expected to rise further in the future.
Since the beginning of this year, natural diamond prices have seen a significant drop, leading people to wonder if the “heavenly price myth” of diamonds is gradually fading.
According to the global natural diamond price index compiled by independent diamond analyst Paul Zimnisky, prices have fallen by 13.6% year-to-date, a 24.6% drop from the historical peak.
Furthermore, due to De Beers disrupting the natural diamond supply chain, its performance also reflects the weakening demand for natural diamonds. In August, during De Beers’ seventh sales cycle of the year, the company sold $370 million worth of natural diamonds, a year-on-year decrease of 42% and a 10% drop month-on-month. This marks the fourth consecutive month of declining sales for the company this year.
Over the past year, De Beers has already lowered the price of its mainstream products—natural diamonds between 2 and 4 carats—by 40%. Industry insiders indicate that natural diamonds still have room to fall further. In the worst-case scenario, prices could drop another 20% to 25% over the next year.
According to media reports on September 20, Alrosa indicated in a memo to clients that the company would temporarily suspend rough diamond sales in September and October. Alrosa stated it believes this move will address the supply-demand imbalance that has emerged in recent months.
Alrosa is one of the world’s largest diamond giants, supplying about one-third of the world’s diamonds, comparable to De Beers, which held a monopolistic position until the beginning of this century.
Data shows that the International Diamond Exchange diamond price index reached a historical peak of 158 in March 2022, then fell to around 110 currently, hitting a new five-year low—a drop of about 30%. Industry professionals stated that sustained high inflation in many countries is an important reason for this phenomenon.
Earlier this month, the Indian Diamond Association called on miners to limit supply. About 90% of the world’s diamonds are cut, polished, or traded through the Indian Diamond Association.
Besides the impact of lab-grown diamonds, natural diamonds not being a store of value is also a key reason for their continuous price decline.
Many users on social media platforms expressed that their high-priced diamond rings experienced a “precipitous drop” in price when resold:
Some even stated that the most valuable part of a 10,000 yuan diamond ring they bought was the 18K gold setting.
The phenomenon of high purchase prices and low resale prices for second-hand diamond rings led many netizens to exclaim, “Buying diamonds is paying the IQ tax.”
Regarding the issue of low resale prices in the second-hand diamond ring market, reporters contacted a jewelry recycling store in Henan. The store’s certified gemologist stated:
Additionally, according to Securities Times, reporters recently randomly interviewed several young consumers shopping for gold jewelry in Shenzhen Shuibei. When asked why they chose gold jewelry over diamond jewelry, the most common response was that gold is more “value-retaining.” Other reasons included gold being easier to cash out and diamond jewelry prices being opaque.
Reporters observed on-site that a 0.5-carat 18K white gold diamond ring priced at around 57,000 yuan was actually sold at 2.5% of the listed price. Moreover, visits to multiple stores revealed that prices and discount levels varied significantly between different stores.
Some stores on-site also indicated that the resale price for natural diamonds would be discounted. On the other hand, many gold jewelry stores marked the gold price for gold jewelry at 460 yuan per gram, meaning the purchase price on the same day.