Diamond prices are down as people spend more on travel and food

Prices for rough diamonds - the raw, unpolished, and uncut stones - have dipped in 2023 as many post-pandemic consumers shy away from luxury goods.

According to the Zimnisky Global Rough Diamond Index, prices are the lowest they've been in a year. Industry analysts attribute the slump to declining sales at the jewelry counter.

As consumers spent less money on dining and travel during the pandemic, "people had excess money to spend on discretionary purchases," noted Paul Zimnisky, a global diamond analyst.

Diamond prices have adjusted to consumers choosing services over jewelry. People are eating out, traveling and spending money on experiences rather than luxury goods, according to analysts.

"Diamonds are a completely consumer-driven market," said Edahn Golan, an independent diamond analyst. Shopper demand for diamond jewelry influences rough diamond prices and, to an extent, retail prices. Retailers stoke consumer demand by pouring hundreds of millions of dollars into advertising.

The plummeting prices follow two record-breaking years in rough diamond sales. In 2021 and 2022, demand for natural diamond jewelry was at an all-time high.

"There was a parabolic move up, and now there's a correction on the other side," Zimnisky noted.