The current landscape with regard to diamond supply is highly dynamic and responsive to global market events. When conditions are especially changeable, our clients rely on our expert insights to help them make vital purchase decisions. Here are our diamond market trend predictions to help you get through Q4.
Supply will continue to tighten—but prices could still fall in the short term.
In previous economic cycles, it was possible to predict price and demand movements six months to a year in advance, but today’s highly uncertain economic climate makes it difficult to forecast more than a couple of months ahead.
At present, supply is tightening slowly, and we expect this trend to accelerate. We have noticed that manufacturers and cutters have pulled back on production activities in anticipation of a downturn that curbs demand for inventory.
While some retail jewelers—especially those that cater to affluent and high-net-worth customers—are continuing to enjoy robust demand, broader indications of an economic slowdown have curtailed mining and production activities. We foresee a price decrease coming soon, with prices likely hitting a short-term bottom this year. A supply reduction in the pipeline will help put a floor under diamond prices if manufacturing cutbacks get to a point where they begin to affect the availability of demand.
Signs point to a slowdown ahead
A confluence of macroeconomic factors are inhibiting economic growth. While the United States is still the largest market for diamonds worldwide, overall demand has not yet rebounded to pre-pandemic levels.
Inflation still weighs on both business and household budgets as prices for goods and services remain elevated. Tighter credit conditions are eating into companies’ profits, making it more challenging for them to grow.
What you need to know
The takeaway for retail jewelers: Make sure to keep tried-and-true basics on hand at all times to stay on the competitive edge. Focusing on ensuring availability of these basics—such as round stones, in particular—will be wise during more fiscally conservative times. It will pay off not to skimp on investing in those dependable diamonds.
As one of the largest diamond suppliers the world over, RDI Diamonds has decades of expertise interpreting what these types of changes mean for our clients. This wealth of insight is especially valuable during periods such as the present one, when conditions have the potential to change within a short time frame. Our clients rely on our insights into supply conditions to help guide their purchase decisions.
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