Getting Engaged Just Got Cheaper as Diamond Market Adjusts – by Jinjoo Lee (Wall Street Journal – August 11, 2023)

A postpandemic glut has led to falling prices for some gems, but they are likely to bounce back

You can’t put a price on true love. Engagement rings are another matter. Luckily for today’s proposal-ready consumers, diamonds are selling at a compelling discount—especially the popular 1-carat range. The bargains are likely only a temporary challenge for the diamond industry, but there are larger forces that threaten to take the sparkle off the stones in the decades ahead.

Hopeful fiancés and fiancées paid through the nose in 2021 and 2022, when the gems’ values rose to a multiyear high. This wasn’t unique to diamonds, of course. The prices of many discretionary goods soared as stimulus-boosted consumers went on a pandemic-fueled spending spree. Industry analyst Edahn Golan estimates that diamond jewelry sales in the U.S. rose 57.4% in 2021 and stayed elevated in 2022.

Diamonds tend to be popular purchases following disasters: Sales surged in the U.S. following the 9/11 terrorist attacks in 2001 and in Japan after a catastrophic tsunami in 2011, according to diamond industry analyst Paul Zimnisky.

“People buy fewer things [after events like that], but nicer and more meaningful things,” he said. “The pandemic was the most recent example of that.” On top of strong demand, the disruption in supply from Russia following its invasion of Ukraine helped push prices even higher in 2022 as western insurers avoided Russian entities and restrictions were placed on the Swift payment system.

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