Editor’s Note
Global diamond prices have fallen sharply from their 2022 peak, driven by economic uncertainty and the growing popularity of lab-grown alternatives. This article examines the market shift and its implications for consumers and the industry.
Diamond prices are plummeting! According to foreign media reports, global diamond prices have fallen sharply by 18% from their historical highs last year. Experts analyze that the reasons for the price drop include the U.S. interest rate hikes leading to global pessimism about economic prospects, causing consumers to reduce purchases of luxury goods. On the other hand, the rise of lab-grown diamonds is also shifting consumers to the more affordable market. Industry insiders predict that natural diamond prices may fall by up to 25% in the coming year, meaning a total drop of 40% from the peak. Those considering buying at the bottom might want to wait a bit longer, as they could potentially buy higher-quality diamonds for the same price.
A CNBC report states that the latest global rough diamond price index shows diamond prices have fallen 6.5% year-to-date and are down 18% from the historical peak in February 2022. A diamond analyst noted that, for example, a 1-carat natural diamond of above-average quality was priced at $6,700 a year ago but is now worth only $5,300.
Wan Zhe, former chief economist of China Gold Group, pointed out that the Federal Reserve began raising interest rates in March last year, triggering a global wave of rate hikes. This shifted the entire financial system from extreme looseness to extreme tightness, making the world cautious about economic prospects. Consumption of non-essential items began to decline, and diamonds are one such commodity.
Pan Helin, co-director and researcher at the Digital Economy and Financial Innovation Research Center of the International Joint Business School at Zhejiang University, noted that the rise and fall of diamond prices can be analyzed from supply and demand perspectives. From the demand side, diamonds are traditionally closely tied to weddings, with the main market in East Asia. However, the number of marriages in East Asia has been declining in recent years, reducing the demand for diamonds.
Taking China as an example, the number of marriage registrations nationwide has been declining year by year since 2014, falling below 10 million in 2019, below 8 million in 2021, and dropping by another 803,000 in 2022. On the supply side, the rise of lab-grown diamonds has led some consumers to switch to the cheaper market.
What about the future trend of diamond prices? Should people buy at the bottom now? Pan Helin believes prices will definitely continue to fall because he views diamonds merely as a form of carbon element, which will eventually become cheap and easily accessible.
Ankur Daga, CEO of overseas jewelry company Angara Jewelry, stated this. He estimates that natural diamond prices may fall another 20% to 25% from current levels over the next year, meaning prices could drop by about 40% from the peak in February last year. If you’re planning to buy diamonds, you might want to wait a little longer.
