The diamond market is experiencing a significant downturn, marking one of the most severe falls in history. Over the past five years, diamond prices have declined by 27%, reaching their lowest point in at least 25 years. Several factors contribute to this dramatic drop.
First, the rising popularity of lab-grown diamonds is reshaping the landscape. These diamonds are not only more affordable but also align with the values of younger consumers who prioritize sustainability. As a result, the global market for lab-grown diamonds has surged, doubling to nearly $25.9 billion in 2024 from around $11 billion in 2011.
Economic uncertainty in major markets like the United States and China also plays a critical role. Consumers in these regions are reevaluating their spending priorities, focusing more on essential goods rather than luxury items like diamonds. Geopolitical conflicts and global economic challenges further exacerbate the decline in demand.
The numbers tell a compelling story. Diamond prices have decreased by 5.7% so far this year, with a total drop of more than 30% from their peak in 2022. The preference for lab-grown diamonds has significantly impacted the prices of natural diamonds, driving them down even further.
Despite these challenges, there are glimmers of hope. Botswana, a key diamond exporter, anticipates economic growth of 3% to 4% in 2025 as the global diamond market is expected to recover. This recovery could help narrow the budget deficit and bolster government spending.
Sources:
https://auctentic.com/blog/news/decline-in-diamond-prices
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