How have diamond prices have changed since 2020?
Since 2020, the diamond market has experienced significant changes linked to sector-specific fluctuations as well as economic and geopolitical events. While exceptional colored diamonds are still as attractive as ever, the white diamond has gone through very contrasting periods.
Has the price of diamonds increased since 2020?
Containment, also a test for the diamond market
Coming out of confinement, the diamond market was on the rise, after a certain decline during the pandemic. Indeed, although diamonds are a possible “safe haven investment”, the market during the pandemic had to face:
-limits and disruptions to the supply chain: closures of mines and cutting centers in particular, and travel restrictions.
-On the demand side, economic uncertainties have led to a reduction in consumer spending on non-essential items, including luxury products such as diamonds, impacted for example by the suspension of weddings and the closure of “physical” points of sale. Although online sales have developed well, the diamond industry has had to take time to adapt to these practices.
The price of rough diamonds is eroding due to the drop in demand to which diamond producers did not react early enough.
A euphoric exit after 2020 for the diamond market
In January 2022, Les Echos headlined: “diamonds shine brightly” After a downturn during the pandemic, sales of precious stones are soaring and prices are increasing. The giants of the sector are recording historic performances. Diamond production is struggling to keep up with demand. Thus, the price of rough diamonds shows an increase of 25%...
Producers posted record sales in 2021: +50% for Alrosa ($4.2 billion), doubly so for De Beers (3.5 billion).
Diamonds and jewelry had confirmed their “consumption postponement” status during the pandemic, and the price was supported in 2021 by stable supply while demand was sustained.
A diamond market in decline since 2022
Then… the market becomes bearish following in February 2022, the invasion of Ukraine by Russia (sanctions and the Russian diamond embargo blocked the Indian market in a very significant way, for example), coupled with the fall of the price of synthetic diamonds. The context is becoming inflationary, particularly in the US: consumers are reducing their “superfluous” spending, while China is experiencing a real estate crisis.At the start of 2023, the diamond market experienced a dramatic fall, with demand falling by approx. 25% compared to 2022. Prices have reached their lowest level in 14 years. De Beers allows for the first time that batches (sights) are not fully purchased.
The excellent investment in colored diamonds
Conversely, auction sales of colored diamonds continue to soar and break all sales records in 2023. Indeed, the rarity of gems is a key factor in the price and colored diamonds, which only represent , according to the GIA, 0.01% of diamonds mined, including 80% of yellow or brown diamonds. Add to the rarity of color and weight, you obtain sales of the most spectacular blue and pink diamonds.The latest sales records for blue diamonds
Blue diamonds have made notable appearances in recent sales, fetching between $2.2 million and $3.57 million per carat.
THE De Beers Cullinan Blue, a 15.10 carat blue diamond, fetched $57.5 million (€54 million) at Sotheby's in 2022 in HK, or €3.57 million per carat.
Bulgari Laguna Blu Diamond, an 11.16-carat pear-cut Fancy Vivid blue diamond/ priced at $25 million in May 2023 during Sotheby's Luxury Week, or at $2.2 million per carat.
The Royal Blue, a 17.61 carat Fancy Vivid Blue IF diamond sold for 39.5 million Swiss francs, or approximately $44 million, at Christie's Magnificent Jewels sale in Geneva on November 7, 2023. This sale price equates to approximately $2.5 million per carat and is at the high end of the pre-sale estimate.
Players in this very particular colored diamond market indicate that this appeal of blue diamonds was particularly strong until 2017. A one-carat Intense blue diamond was trading at the end of 2023 for around $550k.
The good performance of the value of pink diamonds
Pink diamonds continue to be highly rated, with these two sales of 3.3M and 5.18M dollars per carat. The closure of the Argyle mine, the main producer of this color of diamond at the end of 2020, has fueled concerns about the availability of this gem. A very beautiful specimen was discovered in Angola (Lulo mine) and promises to break new records when it is cut.
Indeed, the sale at Sotheby's of the Williamson Pink Star in 2023 was sold for $57.736 million, a Fancy Vivid Pink IF diamond from 11.15 carats, or 5.178 million per carat. Even without reaching the significant weight of the latter, The Eternal Pink, a diamond Fancy Vivid Purplish Pink IF of 10.57 carats, was also sold at Sotheby's for $34.8 million ($3.3M/carat). It was discovered by De Beers in partnership with Botswana in the Damtshaa mine.
Bonhams NY June 2023: €1.08 million Ring in platinum Fancy Pink, rectangular modified brilliant cut with cut corners of 6.22 carats surrounded by two trapezoid and round diamonds.
According to market players, this color is still very popular, with prices trading at the end of 2023 around $325/400k for a carat VS Fancy Intense Pink.
The most exceptional yellow diamonds stand out
During the auction Magnificent Jewels from Christie's in May 2024, we can note a Fancy Intense Yellow diamond of 202.18 carats, sold for CHF 6,095M or another Fancy vivid yellow cushion mixed-cut diamond of 9.55 carats for CHF 630k.
Purple, orange diamonds... the new market trend?
The market for more “exotic” colored diamonds such as purple, lilac, orange, green-blue/blue-green diamonds has gradually developed since the 2010s with a value that has tripled on average since then. Smaller (less than 2 carats), they attract the erudite collector and often also an art lover and consider these diamonds as such, like professionals and jewelry houses. For the players* in this very specialized market, there is no doubt that this market is gaining in interest and is a real rarity market, with sometimes a few years without seeing a single copy!
We can note the sale for example in May 2024 of a Fancy deep yellow-orange diamond of 8.01 carats for CHF 504k and that same month a world record with the Fancy Red diamond, Argyle Phoenix, at 4.2 M USD or 2, 7 M per carat.
To better understand the origin of color in diamonds, and therefore their rarity, find the origin of diamond color in our article:
The Ultimate Guide to Colored Diamonds
How does the diamond market work?
Price drivers of the diamond market
In addition to the intrinsic characteristics that qualify the diamond, all economic, social and geopolitical factors impact the price of the diamond.
Diamond supply and demand
As with any product, the price of diamonds is influenced by supply and demand. Changes in the supply of diamonds, whether due to new mining discoveries, mine closures or government restrictions, can have a significant impact on prices. Likewise, demand trends, which can be influenced by economic, cultural and social factors, play a crucial role in determining prices.
Technological innovation in the diamond sector
Technological advances in diamond cutting and manufacturing can influence prices. For example, the introduction of more efficient and precise cutting techniques can increase the yield of rough diamonds, which could potentially lead to increased supply and lower prices.
Macroeconomic Factors Influencing Diamond Price
Global economic conditions, such as exchange rates, inflation, financial market fluctuations and economic cycles, can impact diamond prices. For example, a period of global economic growth may boost demand for diamonds, while an economic recession may cause demand and prices to decline.
Geopolitical Factors Affecting Diamond Price
Geopolitical tensions and conflicts in diamond-producing regions can disrupt supply and affect prices. Economic sanctions, civil unrest and civil war can lead to diamond supply interruptions and price fluctuations in the global market.
In this regard, the embargo on Russian exports and the war between Hamas and Israel are events which have obviously marked the diamond market and forced players to adapt. The huge cutting market in India, for example, had to seek its crude supply from other mines.
How is the diamond market organized?
The diamond market is a complex global market, characterized by a network of players involved in all stages of the supply chain, from mining to retail. Here is a description of the general organization of the diamond market and the main trading venues:
Diamond mining
Diamond mining is mainly done in mines located in various regions of the world (read below). Large mining companies such as De Beers, ALROSA, Rio Tinto and Dominion Diamond Mines play a major role in the mining and production of rough diamonds.
Diamond processing and cutting
The rough diamonds extracted from the mines are then processed and cut into polished gems. This process is often carried out in specialized diamond cutting centers, such as those in Antwerp (Belgium), Mumbai (India), Tel Aviv (Israel) and New York (USA). These centers are major hubs where rough diamonds are purchased, processed, cut and sold at auction or on the open market. India, for small stones, is the most important center
Diamond exchangesDiamond exchanges are trading venues where diamonds are exchanged between industry players. The most famous diamond exchanges are in Antwerp (Belgium), Mumbai (India), Tel Aviv (Israel), New York (United States) and Ramat Gan (Israel). These exchanges play a crucial role in setting prices and facilitating transactions between buyers and sellers.
Free market in the diamond sectorIn addition to diamond exchanges, there is a free market where diamonds can be traded directly between industry players, such as wholesale traders, jewelry manufacturers and retailers. This market also includes online platforms where diamonds are sold at auction or in catalogs.
Auctions
Diamond auctions are also important in the market. Renowned auction houses such as Christie's, Sotheby's and Bonhams regularly hold sales of high quality diamonds, including exceptional diamonds, colored diamonds and historic jewelry.
Reminder: diamond appreciation criteria
Diamond quality criteria: the 4Cs
A diamond is a precious gem made of crystallized carbon. its main characteristics are known under the name 4C:
- Clarity: Diamonds may vary in clarity. Pure diamonds are rare, and most contain inclusions or imperfections. However, diamonds with fewer inclusions are considered more valuable.
- Color: Diamonds can be found in a variety of colors, although most are colorless or yellowish. Colorless diamonds are the most valuable, and their value is often determined by the absence of color.
- Size (Cut): The way a diamond is cut can influence its brilliance and sparkle. Common cuts include brilliant cut, princess cut, emerald cut, etc.
- Carat weight (Carat): The weight of a diamond is measured in carats, where one carat is equal to 0.2 grams. Larger diamonds are rarer and therefore more valuable.
You can find more details on these 4Cs in the following article:
The diamond is appreciated by its rarity and its quality, confirmed by these 4 characteristics: High quality and large diamond deposits are particularly rare, which means that exceptional diamonds often trade at very high prices on market, as do top quality diamonds, with characteristics such as high purity, perfect cut and intense color, usually more expensive than lower quality diamonds.
Other characteristics appreciated in diamonds
More generally, diamonds are also appreciated because of:
- Shine and shine: One of the most appreciated characteristics of diamonds is their ability to reflect light and sparkle, which results from all of the characteristics mentioned above and which gives the diamond its characteristic brilliance.
- Hardness: Diamond is the hardest known natural substance, rated 10 on the Mohs hardness scale. This means it is extremely scratch resistant and can cut through most other materials. Without a doubt, this particularity has been one of the keys to interest since ancient times.
- Origin: Diamonds are generally mined, although diamonds are also produced synthetically. Natural diamonds are often associated with specific geographic regions, and some diamonds may even have a famous history or provenance. Some origins are more renowned than others for the quality of the gems extracted, such as in Russia for example.
What are the main diamond mines?
We present to you the major producing countries but they only represent some of the places where diamonds are mined around the world. Diamond mining and the industry has played a significant role in the economy and history of many countries.
South Africa, founding mines of the diamond industry
South Africa has long been a leading producer of diamonds. The discovery of diamonds near the Orange River in 1866 led to the diamond rush and the creation of the town of Kimberley, which became famous for its enormous blast hole called the "Big Hole". This discovery led to the founding of the South African diamond industry.
Russia, mines renowned for their quality
Russia is another major diamond producer, with significant mines in Siberia and other regions. The Mirny mine, located in eastern Siberia, is one of the largest diamond mines in the world. Russian diamonds are renowned for their quality, especially their colored diamonds.
Since 2022 and the war in Ukraine, the United States has issued sanctions banning the import of Russian diamonds, followed in early 2024 by Europe. The Russian state has indicated an agreement with Alrosa, the main Russian diamond producer, and will regularly purchase diamonds from Alrosa. This decision can also be explained by waiting for a more favorable market.
Australia, a major diamond producer
Australia is a major producer of diamonds, with mines mainly located in Western Australia and the Northern Territories. The Argyle Mine in Western Australia was famous for its pink diamonds and is one of the world's leading sources of these rare gems.
Botswana, diamond producer since 1960
Botswana is one of the world's leading diamond producers, thanks in large part to the Jwaneng mine, one of the largest open-cast diamond mines in the world. Diamonds were discovered in Botswana in the 1960s, and since then the diamond mining industry has been a significant driver of the country's economy.
Democratic Republic of Congo (DRC) and blood diamonds
The DRC has significant diamond reserves, although the diamond industry has been marred by conflict and issues related to illegal mining and the blood diamond trade in some areas. Despite these challenges, diamonds continue to be mined in the country.
Canada, diamond producer since the 1990s
Canada has become a significant diamond producer since the discovery of diamonds in the Northwest Territories in the 1990s. Mines such as the Diavik mine (also known for ethical and social commitment, one of the largest Canadian rough diamonds were mined there at 187.7 carats at the end of 2015, the Diavik Foxfire, and in October 2018, a yellow diamond of 552 carats was discovered, the largest found in North America) and the Ekati mine are among the largest largest and most productive in the country.
Reminder: The historical evolution of the attraction for diamonds
The allure of diamonds dates back millennia and has grown over time to become a symbol of luxury, power and beauty. Here is a historical account of diamond appreciation through the ages:
antiquity
The first traces of the use and appreciation of diamonds date back to Antiquity. The first written references to diamonds are found in ancient Indian texts, where they were revered as symbols of power, purity and indestructibility. In India, diamonds were used in jewelry, but also as amulets and talismans.
Middle Ages
During the Middle Ages, diamonds were rare in Europe and were mainly accessible to aristocrats and royalty. They were used to adorn crowns, scepters and other insignia of power. The rarity and beauty of diamonds made them symbols of status and wealth.
Renaissance
The Renaissance saw a renewed interest in the arts, science and exploration. Diamonds continued to be valued as symbols of luxury and refinement. Great maritime discoveries opened up new trade routes, allowing diamonds to reach Europe from places like India and Brazil.
Modern era
Beginning in the 18th century, with advances in mining and international trade, diamonds became more accessible to the emerging middle class. Diamonds were now worn not only by the nobility, but also by the bourgeoisie. Diamonds have been used increasingly in jewelry, with more sophisticated cutting techniques improving their sparkle and brilliance.
Twentieth century
During the 20th century, diamonds were closely associated with clever advertising campaigns, such as the famous "A diamond is forever" launched by De Beers in 1947. This campaign helped anchor the idea that diamonds were symbols of eternal love and romance, furthering their appeal in popular culture. A timeless symbol of luxury and love, the diamond remains one of the most precious and coveted gems in the world.
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