Columns

My Diamond Price Predictions for 2021 … And How You Can Capitalize

RDI Diamonds CEO explains why spending will rise and which products will sell best.

Published

3 years ago

February 22, 2021

Michael Indelicato

LIKE MOST PEOPLE across the globe, I’m relieved to see 2020 in the rearview mirror. With a worldwide pandemic, a wild U.S. election and an economic slowdown, it was one of the most trying years in recent history. Now that we’ve ushered in 2021, customers are consistently asking what we can expect in the next six months. Here are my top predictions for the diamond industry this year.

Natural Diamond Prices Will Continue to Climb

We saw diamond prices climb for the holiday season, and while we usually see them hold steady or drop off in Q1, I think we’ll actually see an increase of approximately 5% increase over the next six months.

Why? It’s simply the law of supply and demand. COVID-19 brought about widespread manufacturing shutdowns in India — home to 60% of the diamond cutting and polishing business worldwide — only to reopen at reduced capacities, continuing to slow production of polished and cut diamonds, which requires a great deal of manpower.

The supply and demand rule also applies to lab-grown diamonds, but in the opposite way. China, the leading producer of lab-grown diamonds, has flooded the market, and as a result, lab-grown diamonds have decreased in price by 50 percent since their inception. I believe prices will continue to fall by 10-15 percent over the next 12 months.

Consumer Spending Will Go Up

In spite of record-high unemployment rates and an economic slow-down, consumer spending on diamonds will continue to uptick. Throughout the pandemic, diamond sales increased — those consumers with discretionary income spent money on diamonds and fine jewelry in lieu of vacations, entertainment and dining out. We also saw engagements increase along with the purchases of bigger, better diamond anniversary bands. This will continue for at least the first half of 2021.

The Vaccine Effect

Like nearly every industry, a return to normal will happen when COVID-19 is controlled. At that time, I predict diamond manufacturers will go back to full capacity, helping to mitigate the supply issue and thus, we’ll see prices begin to stabilize.

As vaccines continue to roll out, we’ll also see in-store traffic finally reach pre-pandemic levels again. It will be important that jewelers are ready to capitalize on that traffic with what I expect will be this year’s top sellers, including:

Simplified, dainty settings are trending.
Yellow gold is experiencing a resurgence and currently accounts for 20% of the market.
Oval cut is the hottest of-the-moment fancy diamond shape.
Round brilliant cut diamonds are consistently the most popular, and thus will always be in high demand.
Nationally, we see a buying pattern of SI1s, SI2s, and I1s and colors ranging F to J.
Diamond studs are always a sure bet because they sell year-round and are timeless pieces that never go out of style.

All in all, for jewelers and consumers alike, I predict better days ahead!

This Third-Generation Jeweler Was Ready for Retirement. He Called Wilkerson

Retirement is never easy, especially when it means the end to a business that was founded in 1884. But for Laura and Sam Sipe, it was time to put their own needs first. They decided to close J.C. Sipe Jewelers, one of Indianapolis’ most trusted names in fine jewelry, and call Wilkerson. “Laura and I decided the conditions were right,” says Sam. Wilkerson handled every detail in their going-out-of-business sale, from marketing to manning the sales floor. “The main goal was to sell our existing inventory that’s all paid for and turn that into cash for our retirement,” says Sam. “It’s been very, very productive.” Would they recommend Wilkerson to other jewelers who want to enjoy their golden years? Absolutely! “Call Wilkerson,” says Laura. “They can help you achieve your goals so you’ll be able to move into retirement comfortably.”