If you or your clients have been yearning for a gorgeous piece of jewelry or a precious stone, 2025 could be a good year to take the leap. Right now, it’s a buyer’s market, with opportunities that balance quality, rarity and long-term value.
Rocky road
Cyclical price movements have always been a natural companion of the diamond market for rough and polished alike, but this time, the price dip has lasted longer.
One of the key reasons is a post-pandemic supply glut. Intoxicated by their phenomenal sales during the pandemic, mining companies and manufacturers kept the production floodgates open in 2022 when they should have curtailed diamond output. Rather than continuing to rise as they expected, diamond demand softened. As borders reopened, people started traveling with a vengeance, favoring options other than jewelry to celebrate the special milestones they’d been forced to postpone.
Russia’s invasion of Ukraine caused a ripple effect, increasing prices of goods and services globally, which in turn impacted consumers’ purchasing power. An economic slowdown in China reduced demand from the world’s second-largest diamond market. And effective marketing for synthetics disrupted the stronghold of natural diamonds: the US bridal segment.
“Last year was tough,” says Nilesh Chhabria, chief operating officer of Finestar Diamonds, which specializes in precision cuts and has operations in India, Namibia, South Africa and Botswana. “But the fourth quarter of 2024 and the first quarter of this year are showing positive signs. In most categories, prices are stable, and in some, they have started rising.”
How will the latest US tariffs affect the diamond business? Chhabria predicts that “for the next month or two, US customers won’t feel the pain of the tariffs, as there is enough old stock in the market. But once that inventory is finished, diamond prices will jump in the US. In India, we will likely see significant contraction in the diamond-manufacturing sector, resulting in many job losses. It’s too early to comprehend the full impact of the US tariffs. We need to see if [businesses take any measures] to alleviate some of the tariff burden.”
A trend of a different color
Colored gemstones, in contrast, have not taken the price tumble that diamonds have.
Industry insiders explain that more than 80% of diamonds come from institutional sources, while barely half of colored gems can be traced to a formal mine; most are from informal, unregulated sources. The border closures and travel bans of the global pandemic further disconnected these already fragmented gem supply lines, making goods harder to come by in the market. When demand for precious stones skyrocketed in 2020 to ’21 and diamond producers increased their output to meet it, gem manufacturers could not do the same, as colored-stone deposits are rarer in nature. This caused gemstone prices to rise further.
Even before the pandemic, demand and prices for colored gemstones had been steadily rising. The discovery of new deposits in Africa and the establishment of large-scale mining operations by players like Gemfields — which has also invested heavily in marketing gems — have played a vital role in the jewelry sector’s turn toward color.
Marco Hadjibay points to the investment market as a reason consumers are choosing gems over diamonds. “Consider an individual who might have bought a D-flawless, 10-carat diamond at $200,000 a carat,” says the creative director of US-based Bayco Jewels. “Today, if they want to sell their diamond, they’re going to get $65,000 to $70,000 a carat for it. That’s a big hit on a major investment. On the other hand, when you look at rubies, sapphires, emeralds, blue diamonds or pink diamonds, their prices have only followed an upward trajectory, never reducing over the last 100 years. Modern buyers are taking note and reacting accordingly.”
Such buyers include diamond specialists looking to diversify into colored gems so they can up their profit margins. RapNet, the world’s largest diamond-trading platform, recently launched a colored-gemstone edition in partnership with the American Gem Trade Association (AGTA).
But the gaps in people’s knowledge have consequences. Many new buyers from the diamond industry are basing their gemstone purchases on lab reports instead of in-person evaluation. This is driving prices up for gems that a seasoned colored-stone specialist might have assigned a lower value.
New gem buyers also need to consider treatments, which play a major role in determining a stone’s price and value appreciation. In March, for instance, a joint statement from AGTA, the World Jewellery Confederation (CIBJO) and the International Colored Gemstone Association (ICA) warned the industry about color instability in sapphires from Sri Lankan gem merchants. The groups attributed the phenomenon to undisclosed irradiation treatments that temporarily alter color.
Emerald eventualities
Despite the rising prices, certain segments of the emerald market offer buyers opportunities.
“The display of large emerald-studded jewelry at the Ambani wedding in 2024 boosted demand for emeralds,” says Sakhil Dhaddha, director of international jewelry firm Gem Plaza and India-based brand Gyan Jaipur, regarding the high-profile bash celebrating the marriage of Indian billionaire Mukesh Ambani’s son last July. However, “in the last six months, that demand has softened. Trade buyers are only acquiring what they need, whereas previously they would buy fine-quality emeralds to simply add to their collection.”
Rough-emerald auctions at Gemfields have also underlined this slowdown in demand. Following the miner’s November 2024 sale, managing director of product and sales Adrian Banks called the results overall “very disappointing, driven by fewer and poorer bids for lesser-quality grades.”
A subsequent auction this past February, offering rough emeralds that had gone unsold at the November edition, yielded better results, with revenues of $4.8 million and an average sales price of $105 per carat. “Although market sentiment remains clearly subdued, it is encouraging to see improvement in both demand and pricing,” Banks said at the time.
The peaks in demand during and after the pandemic were unnatural, according to industry players, who say the market is now course-correcting.
Gem merchant Jay Pungalia recalls this past March’s Hong Kong gem and jewelry shows as “fantastic, with buyers not only for top-tier rubies, emeralds and sapphires, but also tourmalines, aquamarines, tsavorite garnets and more. Our clients were from China, and many from India. But the momentum post-Hong Kong has slowed down.”
The high-end advantage
While there are opportunities for buyers in the commercial-grade gem market, the higher end operates differently.
Bangkok-based firm KV Gems specializes in supplying top-tier, untreated rubies, sapphires, spinels and tsavorites. For those high-quality wares, “there is always demand,” says company partner Maria Belmont. “Economic and political uncertainty has resulted in a temporary softening of demand by approximately 30% to 50%, but prices continue to rise because of the difficulty of sourcing premium gems.”
In Germany and Italy, the sentiment is cautious optimism. “The market for colored gems is stable right now,” reports Claudia Hamann, founder of Munich-based jeweler Claudia Hamann Edelstein. “Prices have not come down at all. In fact, the challenge now is how to replace the gems being sold, at sensible, business-friendly prices.”
In these tumultuous times, consistent supply and good marketing can support business, but only up to a point. It pays for both buyers and sellers to remember the fundamentals of value: beauty, durability and rarity.
The Jeweler’s View
Industry members weigh in on whether now is a good time to purchase stones.
“I’ve witnessed significant shifts in the market over two decades. When I first started, it was a seller’s market, but today, I strongly believe it has become a buyer’s market. With the rise of the internet and social media, buyers can compare prices, research brands, and negotiate the best deals like never before. There has never been a better time to make smarter choices, demand better prices and find exceptional pieces.”
“The diamond market remains a buyer’s market, with polished prices under sustained pressure due to weak demand, and manufacturers under pressure to sell. However, sentiment is shifting; trade shows [in] Italy, Doha and Hong Kong saw improved interest, and China is beginning to show signs of revival. Gaps in supply for nicely made fancy shapes and larger sizes suggest prices may rise soon, making now a smart buying opportunity.”
“It’s definitely a buyer’s market. Gold prices are at an all-time high, and fewer gemstones are being produced, creating scarcity. On the consumer level, rare gems and gold are excellent investments, especially in volatile times. Unlike stocks, they always hold or increase in value and bring joy to the wearer.”
Main image: Sapphire and diamond ring by Bayco. (Bayco)
