Diamond Price Declines Show Signs of Stabilising

Diamond prices softened at a slower pace in January, particularly in smaller stones that had experienced steep drops in recent months, according to Rapaport News. Buyer sentiment remained cautious amid ongoing price volatility, tariff-related concerns, and geopolitical uncertainty. However, confidence improved slightly following the US–India trade agreement announced in early February.

While market segmentation persisted, the divide was less stark than in the previous year. Prices in the US held firmer compared to India, and diamonds weighing over 1.20 carats performed better than smaller sizes.

According to the RapNet Diamond Index (RAPI™), which tracks round diamonds from D to H colour and IF to VS2 clarity, prices for 0.30-carat and 1-carat stones declined by 1.3% in January, following two months of steeper falls. The 0.50-carat index dropped 1.2%, while 3-carat diamonds fell 1.6%, reversing a period of relative stability. Meanwhile, round 1-carat diamonds in the D–H, SI category slipped just 0.1% for the month, after a sharp 24.1% decline in 2025.

Post-holiday retail activity in the US was seasonally subdued, with jewellers showing interest in round and fancy-shaped diamonds of 1.50 carats and above. Demand from Europe for stones weighing over 5 carats remained healthy. In India, jewellery demand weakened due to elevated gold prices, while the Chinese market continued to struggle.

At the rough level, De Beers lowered prices at its January sight, raising concerns that cheaper goods could saturate the market. In 2025, increased supplies of lower-value rough from Angola and Russia had already pressured polished prices, particularly for diamonds under 1 carat.

Broader challenges for the industry persist. US tariffs continue to restrict access to the world’s largest retail market, although President Donald Trump’s agreement with India on February 2 is set to reduce tariffs from 50% to 18%, with the possibility of fully exempting Indian diamonds. Additionally, rising gold and silver prices have constrained consumer spending, despite a notable correction in early February.

Structural factors are also weighing on demand. The growth of lab-grown diamonds, China’s economic slowdown, and shifting social trends such as declining marriage rates have led to a permanent reduction in diamond demand. Any recovery is expected to be gradual, with short-term price improvement hinging on the industry’s ability to adapt through downsizing and tighter supply management.