Editor’s Note
The recent surge in the IDEX polished diamond price index highlights a nuanced recovery within the natural diamond market. While broader conditions remain volatile, this rebound—particularly in larger carat categories—suggests a shifting dynamic where selective strength is fostering a fragile equilibrium.
Recently, the strong rebound of the IDEX polished diamond price index has once again thrust the natural diamond market into the spotlight. Data shows that the index closed with a significant gain of 4.83% in June, marking the largest monthly increase since the post-pandemic recovery. Despite the complex and volatile overall market trend, diamond prices in the larger carat ranges have remained firm, achieving a delicate market balance. Notably, the segment for diamonds weighing 4.00-4.99 carats with a color grade of G or higher saw significant price increases, sending positive signals for the natural diamond market.
Simultaneously, a report released by Tenoris on July 7th revealed positive developments in the U.S. diamond jewelry market. In June, the market continued its upward trajectory from the previous month. Looking at the first half of the year as a whole, sales of finished natural diamond jewelry grew by 3%. This growth is underpinned by two distinct trends: first, a reduction in consumer spending on lower-priced products, with the market increasingly focusing on high-end items priced above $2,500, leading to sales growth despite a decline in unit volume; second, diversified consumer sentiment, with sales of natural diamond jewelry such as pendants, bracelets, and necklaces all experiencing a degree of growth.
Market feedback over the past six months further indicates that demand for round diamonds below 1.2 carats has shown some weakness, while demand for diamonds above 2 carats remains robust. Current consumer groups are increasingly inclined towards larger, high-quality natural diamonds. These diamonds are not only aesthetically pleasing but also possess value for long-term investment or as heirlooms. In the investment market, they have also demonstrated higher transactional value.
In this regard, Mr. Lin Qiang, President of the Shanghai Diamond Exchange, spoke highly of the investment value of natural diamonds.
Looking ahead, the investment market centered on natural diamonds will exhibit characteristics of personalization, diversification, and sustainability. The new generation of consumers is gradually taking the initiative in consumption, bringing new opportunities for the development of natural diamonds. As children of the ‘baby boomer’ generation inherit wealth from their parents, a portion of these funds may be used to purchase luxury goods or upgrade existing asset allocation plans. Simultaneously, jewelry inherited from parents may be sold, potentially stimulating the prosperity of related secondary markets.
Mr. Lin Qiang anticipates that by 2030, China’s share of global luxury consumption will grow from the current 22%-24% to 35%-40%. A significant portion of diamond jewelry sales falls into this category, and as the main consumer group, Generation Z consumers will increasingly recognize the value of natural diamonds as a scarce investment asset class.
Overall, the long-term appreciation characteristics of natural diamonds are not only supported by market transaction data but also influenced by their natural attributes. The label of scarcity is the key factor ensuring their ability to thrive against market headwinds.