In the Zimnisky Global Rough Diamond Index, prices are the lowest they’ve been in a year. Industry analysts report a decline in jewelry counter sales.

Paul Zimnisky, a global diamond analyst, noted that consumers had excess money to spend on discretionary purchases during the pandemic. As consumers choose services over jewelry, diamond prices have adjusted. According to analysts, people are spending money on experiences rather than luxury goods, such as eating out and traveling.

“Diamonds are a consumer-driven market,” said Edahn Golan, an independent diamond analyst. Retail prices and rough diamond prices are influenced by consumer demand for diamond jewelry. Hundreds of millions of dollars are spent on advertising by retailers to stoke consumer demand.

After two record-breaking years in rough diamond sales, prices are plummeting. Natural diamond jewelry was in high demand in 2021 and 2022. Zimnisky pointed out that “there was a parabolic move up, and now there’s a correction on the other side.”

Even if rough diamond prices drop, shoppers won’t see cheaper prices in stores.

In the short term, retailers usually don’t adjust their in-store prices according to rough diamond market prices, regardless of whether the products become cheaper or more expensive. Golan says retailers set a price point and protect their gross margins fiercely.

The price of a one-carat round diamond at the store is on average 3% higher now than it was in January 2020, he said, even though rough diamond prices are declining. According to Zimnisky, some jewelers will take advantage of a drop in wholesale prices in the short term to increase margins.

Retail sales are expected to rise during the winter holidays and into early 2024, according to industry analysts.