Consumers should expect higher diamond prices as strong demand has been driving them up in recent months. After consumer retail purchases dropped in March and April, US retail activity surged in the summer months. This renewed demand includes jewelry and diamonds and is causing diamond prices to rise.
Jewelry sales shoot up
The COVID-19 pandemic led to a deep plunge in jewelry sales in March and April, with a recovery starting in May. That positive change developed into an exceptional rise in jewelry sales during the summer months, straight into the holiday season.
This surge is not completely surprising. Historically, consumer demand for jewelry rises early and sharply following periods of deep economic concern and national fear. Consumers have a preference for lasting items with clear emotional value such as diamond jewelry in response to the uncertainty of such times.
Expect higher diamond prices
The revival in consumer jewelry purchases has led to a rise in demand for loose diamonds by jewelry manufacturers and retailers in the US and China. This, in turn, has led to a strong jump in the wholesale transaction prices of diamonds.
Even prior to the lockdowns, consumer demand focused on a limited range of diamonds. As diamond polishing activity grinded to a halt, goods in continued demand became scarce, if not completely unavailable.
Photo © Tiffany & Co.