Through early-October, natural diamond prices as measured by the Zimnisky Global Rough Diamond Price Index have retreated approximately 10% from an all-time high reached in January.

Industry analyst Paul Zimnisky notes that the diamond market was in short supply from the second half of 2021 to early-2022, as record demand for natural diamonds in 2021 outpaced new production and existing inventories. This dynamic pushed rough diamond prices up 30%-plus last year.

However, following aggressive restocking by the supply chain earlier this year, global economic uncertainty and further pandemic-related lockdowns in China have subsequently softened diamond demand and thus prices.

That said, diamond prices remain well above pre-pandemic levels and multi-decade-high producer cost inflation combined with restrictions on the global trade of Russian diamonds is expected to support diamond prices going into next year.

Zimnisky clarified that consumers should not expect discounts on natural diamonds this holiday season as jewelers are not sitting on significant levels of excess inventory, although the industry should be better stocked than last year.

“If anything, diamond and gold mining companies have seen their production costs skyrocket this year, as everything from labor, to fuel to consumable and insurance costs are up in some cases high double-digit percentages. These cost increases are being passed along through the supply chain,” said Zimnisky.

On the retail front, “jewelry, notably, precious metals and stones, have historically performed relatively well in high inflationary environments, which I believe will allow diamonds and jewelry as a category outperform this holiday season,” he added.

“If we see demand this holiday season that is anywhere in-line with last year, it will cap another very strong year for the industry, especially given the externalities,” Zimnisky concluded.

Diamond prices can be actively tracked with the Zimnisky Global Rough Diamond Price Index. A trailing 52-week chart can be freely accessed here.

For more comprehensive trends, forecasts and analysis of the diamond and jewelry industry, consider subscribing to Zimnisky’s State of the Diamond Market, a monthly professional client report.

-- Paul Zimnisky, CFA is a leading independent diamond industry analyst and consultant based in the New York metro area. His research and analysis on the diamond industry is used globally by financial institutions, management consulting firms, private and public corporations, governments, intergovernmental organizations and universities. Paul is regularly interviewed and quoted as an industry expert by prominent media outlets including The New York Times, CNN, The Wall Street Journal, Bloomberg, Reuters and The Financial Times. More information can be found here. He can be reached at paul@paulzimnisky.com and followed on Twitter @paulzimnisky.

For detailed analysis of the natural and lab-created diamond industry, please inquire to paul@paulzimnisky.com for information on consultation rates and custom research capabilities. For subscription information or to request a sample of Paul Zimnisky’s State of the Diamond Market, please contact: subscriptions@paulzimnisky.com.

Disclaimer: The views expressed above are strictly that of Paul Zimnisky, and are based solely on observations and opinions. Paul Zimnisky has made every effort to ensure the accuracy of information provided, however, accuracy cannot be guaranteed. The information is strictly for informational purposes and should not be considered investment advice. Consult your investment professional before making any investment decisions. Paul Zimnisky does not accept culpability for losses and/ or damages arising from the use of the above content. Third party use of this content is only permitted with the permission of Paul Zimnisky.

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