In a recently published press release, diamond analyst Paul Zimnisky issues several “comments on the diamond and jewelry market going into holiday 2022”, the bottom line being: diamond prices may well be at all-time highs, “but consumers should not expect discounted prices this holiday season.”
According to the Zimnisky Global Rough Diamond Price Index, diamond prices have retreated approximately 10% from an all-time high reached in January. While rough prices were pushed up 30% last year due to short supply and record demand, “aggressive restocking by the supply chain earlier this year, global economic uncertainty and further pandemic-related lockdowns in China have subsequently softened diamond demand and thus prices” in 2022.
That being said, diamond prices are still “well above pre-pandemic levels”. Several factors – multi-decade-high producer cost inflation as well as restrictions on the global trade of Russian diamonds – are expected to support diamond prices going into next year.
Therefore, Zimnisky says, consumers should not expect discounts on natural diamonds this holiday season “as jewelers are not sitting on significant levels of excess inventory, although the industry should be better stocked than last year.”
“If anything, diamond and gold mining companies have seen their production costs skyrocket this year, as everything from labor, to fuel to consumable and insurance costs are up in some cases high double-digit percentages. These cost increases are being passed along through the supply chain,” said Zimnisky.
On the retail front, “jewelry, notably, precious metals and stones, have historically performed relatively well in high inflationary environments, which I believe will allow diamonds and jewelry as a category to outperform this holiday season,” he added. “If we see demand this holiday season that is anywhere in-line with last year, it will cap another very strong year for the industry, especially given the externalities,” Zimnisky concluded.
