Diamond industry faces new opportunities as consumer behaviour shifts


Joe Baker
Joe Baker
Senior Copywriter
Joe is a Senior Copywriter working on reports, news and analysis. Previously, he worked as a B2B copywriter, journalist and editor covering a broad range of topics, including technology, transport,… Read more
  • The rough diamond market has experienced a significant decline in prices, marking a contrast to the record-breaking years of 2021 and 2022.
  • According to the Zimnisky Global Rough Diamond Index and industry experts, this decline is attributed to reduced sales in the jewellery sector.
  • Wealthy individuals looking to purchase diamonds and other luxury items should utilise a safe mode of money transfer when making payments.

The diamond industry is experiencing a significant decline in prices, a trend that can be attributed to shifting consumer preferences in the jewellery sector.

This drop is attributed to reduced sales in the jewellery sector, as consumers shift their spending priorities amid changing circumstances.

The Covid-19 pandemic also had a significant impact on consumer behaviour and spending habits – with restrictions on dining out and travel, consumers found themselves with more disposable income to allocate to discretionary purchases.

With more disposable income being allocated to experiences such as dining out and travel, luxury goods such as diamonds have taken a backseat.

Amid an uncertain economic climate characterised by rising inflation and a cost-of-living crisis, high net-worth individuals (HNWIs) are strategically reallocating their resources.

Many are diverting their expenditures away from diamonds and luxury items and exploring alternative investment options such as real estate or other global opportunities. HNWIs should use safe international money transfer options when purchasing diamonds and other luxury goods.

The fall in rough diamond prices may come as good news for those in the diamond industry, but consumers may not immediately see reductions in retail prices.

Despite the decrease in costs for rough diamonds, retailers often do not adjust their in-store prices in response to short-term market fluctuations, as they are more focused on maintaining their gross margins rather than passing on cost savings to consumers.

The cost of buying a one-carat round diamond from a store has actually increased by an average of 3% since January 2020.

This phenomenon, as highlighted by independent diamond analyst Edahn Golan, raises questions about the pricing strategies adopted by jewellers when wholesale prices experience a decline.

The winter holidays have always been a lucrative season for retail sales, particularly for jewellery companies.

With industry analysts anticipating a rise in retail sales during this time, it’s no surprise that the market is gearing up for peak engagement season.

As noted by Zimnisky, experts are predicting a year-over-year decline in holiday season sales, but with robust employment and a strong stock market in the US, there is hope for a gradual recovery in rough diamond prices in 2024.

In the current economic climate, consumers are facing rising inflation and a cost-of-living crisis – as a result, people are scaling back their expenditures on diamonds and luxury items.

HNWIs should compare exchange rates before engaging in global business transfers. Wealthy individuals can use our online money transfer comparison tool to find the best exchange rates.

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