Editor’s Note
The diamond market has reached a historic low, with prices falling nearly 20% over the past year. This article examines the factors behind the sharp decline and what it signals for the future of the industry.
Diamond prices have hit a new low. The “Diamond Price Index” compiled by Diamond Standard shows that as of June 9, 2025, diamond prices are near their lowest level since records began in early 2002.
According to Bloomberg, citing the Diamond Standard Index, the index recently fell to 3300, just a step away from its low of 3290 on June 5, 2025. Compared to the level of nearly 4100 in June last year, this diamond price index has plummeted by nearly 20% in the past year. The index reached a record high of 8488 on June 24, 2011, with an average of about 5294 since early 2002.
The Diamond Standard Index is the market pricing for the Diamond Standard Coin, and ten times this index is the market pricing for the Diamond Standard Bar. These physical diamond commodities are interchangeable and can be tracked on the spot market. Each contains a set of equivalent natural diamonds assembled under the supervision of the Bermuda Monetary Authority.
The Diamond Standard Coin was issued on March 1, 2021, at a price of $5,000. The index has been back-tested to 2002 using wholesale diamond prices. Each diamond coin and bar comes with a wireless chip that stores a blockchain token licensed by regulators. While the physical commodities are stored in vaults approved by the Chicago Mercantile Exchange (CME), the token holders are the legal owners. The tokens can be used for delivery to settle futures, options, and ETF holdings.
Natural diamond prices have been weak since the COVID-19 pandemic subsided, facing a structural crisis of chronically low demand.
Analysis points to several factors. First, the post-pandemic interest rate hike cycle in the US, coupled with China’s economic struggles in the real estate crisis, has dampened global luxury consumption. Second, there is an oversupply of natural diamond mining. Third, competition from lab-grown synthetic diamonds, which are more favored by younger generations. The combination of these forces has led to the diamond market’s downturn in recent years.
While major diamond producers like De Beers have actively reduced production, offering hope for market stabilization, a fourth fatal blow came with US President Trump’s imposition of import tariffs.
The US is the world’s largest diamond market but does not mine any diamonds itself. About 90% of diamonds are cut and polished in large centers in India. Currently, all diamonds imported into the US are subject to a 10% tariff, and face further taxation when the 90-day “reciprocal tariff” suspension period ends.
Bloomberg reported last month that the world’s largest diamond supplier, De Beers, has been secretly offering significant price cuts to sell rough diamonds to a small number of clients.
The report states that De Beers typically tries to avoid public price cuts to prevent further weakening an already fragile market. These secret deals are aimed at reducing its ballooning inventory.
However, this move has created a huge gap between its official pricing and valuations in the open market. The open market refers to the 10 auctions De Beers holds annually in Botswana, where about 70 registered buyers are not allowed to negotiate prices.
An anonymous buyer revealed that in recent months, De Beers has concluded private deals with a few clients, selling hundreds of millions of dollars worth of rough diamonds. Informed sources added that the company has been selling these diamonds at prices 10% to 20% below the official list price.
It is reported that rumors about these secret transactions have intensified tensions among De Beers’ buyers. Buyers not selected for the special deals are still expected to pay official prices at De Beers’ fixed auctions. When they sell polished diamonds to retailers, they also face the risk of competitors undercutting them with lower prices.
In regular sales sessions, De Beers sets prices and informs its clients (known in the industry as sightholders) of the quantities they are expected to purchase. While buyers can refuse, doing so may jeopardize their future supply.
De Beers usually tries to avoid price cuts to avoid destroying market sentiment. Furthermore, with recent signs of market recovery, at least before the tariff war, formal price cuts were not a wise move.
But over the past year, as De Beers was unwilling to slash prices significantly, its official prices remained far above the valuations in the overall plummeting market, worsening the inventory situation. Bloomberg previously reported that many De Beers clients had stopped buying, with some even ceasing to attend the auctions altogether.
This may explain why De Beers resorted to secretly offering discounts to certain clients. The company’s bargaining power may not be what it once was.
To find a bottom for diamond prices, traditional brands in their marketing have begun emphasizing that natural diamonds are “crystals of the Earth” formed over “billions of years,” attempting to differentiate them from sustainable and eco-friendly lab-grown diamonds.
Exchange4media points out that major jewelers are providing provenance data for diamonds, emphasizing their unique stories and intrinsic value.
For example, N. Chandramouli, CEO of TRA Research, stated:
True value stems from its irreplaceable nature. Just as art lovers cherish original masterpieces, the charm sought by high-end jewelry connoisseurs is not that of a replica, but the undeniable allure of the genuine article.
However, production cuts are also a serious matter. The latest Goldman Sachs report estimates that global rough diamond supply would need to be reduced by another 20% for diamond prices to potentially stop falling and stabilize.