Many of our customers inquiring about diamond engagement rings are asking us about current diamond prices and whether now is a good time to make a purchase.
Going back to the time of the COVID-19 pandemic, natural diamond production was significantly impacted, with output reduced to levels not seen since the 1990s. As a result, 2021-2022 saw a post-pandemic boom, with the market overproducing to meet the demand backlog. This led to a correction, with prices falling by 25% from their highs in early 2022. Additionally, the rise of lab-grown diamonds (LGDs) has been a notable trend, capturing a growing portion of the overall market.
Demand for diamonds has also seen a general worldwide decline, especially in China, where consumers are increasingly opting for gold jewellery as a store of value.
Rapaport predicts that LGD’s will dominate the U.S. bridal market in 2024, accounting for more than 50% of engagement ring sales. However, this dominance is expected to be short-lived, with the synthetic bridal market likely collapsing in 2025 as their low prices make them less desirable for engagement rings. As a result, demand for natural diamonds is expected to rebound strongly as consumers return to traditional engagement rings, whose price is considered more fitting for the symbolic gesture of commitment.
This forecast is supported by research from the Boston Consulting Group (BCG) in their May 2024 report, "The Future of the Natural Diamond Industry," commissioned by De Beers. While BCG's timeline is more cautious, it agrees with Rapaport's outlook that the synthetic diamond market will experience significant price drops, pushing them out of the bridal sector and into the niche of high-end costume jewellery, alongside items like cubic zirconia, moissanite, and other synthetic gemstones.
A reduction in supply, along with sanctions against Russia, is starting to have an impact on the market as well, leading to expectations of a modest rise in natural diamond prices in 2025.
So now may be a very good time to buy, with prices at their lows. In terms of diamond shapes, oval diamonds in the 2-3 carat range are currently the most popular, with diamonds under 2 carats or over 3 carats showing some good value. Round diamonds remain a favourite, while other shapes like pear, marquise, and emerald cut offer great value. Solitaires have shown more of a price decline than smaller diamonds, providing opportunities for value with engagement rings, studs, and pendants, but less so for tennis bracelets or necklaces.
