In a recent article on Solitaire, an B2B gem and jewelry magazine published by India’s Gem and Jewellery Export Promotion Council (GJEPC), diamond analyst Paul Zimnisky discusses the factors expected to affect the global diamond demand in 2024.
In the US, says Zimnisky, inflation is predicted to retreat to the Fed’s 2% annual target by 2025, a substantial drop from the 8% peak in 2022. If employment remains stable, this scenario could lead to a more accommodative economic policy in the medium term.
While there is a strong correlation between diamond demand and economic growth in major consumer markets, a micro factor may offset some of the overall economic softening in the near term. A potential resurgence in the U.S. engagement ring market from 2024 to 2026 could act as a catalyst for diamond demand.
This expectation is based on the timing of marriage engagements, which often occur around three years after couples begin dating. Adjusting for the pandemic’s impact, which delayed the formation of new relationships, a new cycle of bridal engagements is anticipated.
Turning to China, the world’s second-largest diamond market, consumer demand in 2023 fell short of expectations, a trend that may persist into 2024.
According to the analyst, there is mounting speculation that China’s economy is entering a more prolonged structural moderation, reflecting the sentiments expressed by prominent market players like Chow Sang Sang, which is adopting a more cautious approach to store openings.
That being said, China has a history of stimulating its economy with government-induced consumption stimulus, which could come into play to support the diamond market, particularly during a period of slowdown.
Read the full article here.
