Diamond prices dip as people prefer to spend on travel, experiences post-pandemic

The dip in diamond prices comes after a record-breaking high of two years in sales.

The post-pandemic population will rather spend money on travel and dining experiences than on buying luxury goods such as diamonds. Prices for rough diamonds — the raw, unpolished, and uncut stones – have dipped in 2023, according to the Zimnisky Global Rough Diamond Index. Prices have been the lowest in a year and the slump might be due to declining sales.

As consumers spent less money on dining and travel during the pandemic, "people had excess money to spend on discretionary purchases", Paul Zimnisky, a global diamond analyst, said. So, diamond prices have adjusted according to that as consumers are choosing services over jewellery.

People are eating out, travelling and spending money on experiences rather than luxury goods, according to analysts, CNN reported. "Diamonds are a completely consumer-driven market," Edahn Golan, an independent diamond analyst, said.

The dip in diamond prices comes after a record-breaking high of two years in sales. In 2021 and 2022, the demand for natural diamond jewellery was at an all-time high, according to CNN. "There was a parabolic move up, and now there's a correction on the other side," Ziminsky added.

However, a drop in the precious stone’s prices doesn’t mean that retailers will charge less for diamond jewellery. Retailers typically do not adjust their in-store prices based on the rough diamond market in the short term, regardless of whether the products become cheaper or more expensive on the back end, the news outlet revealed.

Even though the prices of rough diamonds are falling, the price of buying a one-carat round diamond at the store is on average 3 percent more expensive than in January 2020, Golan told the outlet.

"In the short term, if wholesale prices fall, some jewellers are going to try to use the opportunity to capture more margin," Zimnisky said.

Industry analysts expect to see a jump in sales during the winter holidays like Christmas and Valentine’s Day.