The economist named the reasons for the fall in diamond prices in 2026

The decrease in the 1 carat diamond price index by almost 10% in 2026 compared to 2025 is not due to the usual market correction, but to the structural restructuring of the entire diamond market. Evgeny Shatov, a partner at Capital Lab, told Izvestia on January 14.

"The 10% drop in prices for 1—carat stones and 20-26% drop in prices for smaller stones shows that the market is adjusting in several directions at once: demand, supply and consumer preferences are changing simultaneously. The key factor in the price reduction was the weakened global demand for jewelry in the middle price segment," the expert explained.

He said that in 2024-2025, consumers in the United States, China, and the EU were under pressure from high inflation and expensive loans, which delayed jewelry purchases in the first place. This was especially true for products with 0.3 and 0.5 carat diamonds, which are more often purchased as mass or impulse goods. 1 carat stones have traditionally been closer to the investment and status category, so their prices have declined more slowly, but they have also failed to completely avoid market pressure.

According to Shatov, an additional factor on the supply side was the accumulation of reserves among cutters and traders, primarily in India, a key global center for processing small and medium—sized stones. Production in previous years continued by inertia, while final demand has already begun to slow down. This led to an oversupply in the 0.3–0.5 carat segment and, as a result, to a sharper decline in prices. Large stones and diamonds with rare characteristics in color and purity proved to be better protected due to the limited supply.

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The economist also pointed to the increasing competition from laboratory-grown diamonds. According to him, they are the ones that most actively displace small-sized natural stones, since the visual difference is minimal for the consumer, and the price gap is significant. This puts direct pressure on the prices of fine natural diamonds, while the segment of 1 carat and above still retains a relative "premium for naturalness", although it is gradually decreasing.

"For the jewelry industry, such price fluctuations are a double-edged sword. On the one hand, lower diamond prices reduce the cost of products and give retailers the opportunity to boost sales through more affordable prices. On the other hand, the cost of inventory is falling, the financial situation of manufacturers and distributors is deteriorating, and margins are becoming less predictable. This is especially painful for companies focused on the mass segment: they either have to lower prices faster than the market, or change the product line," the expert said.

Speaking about the prospects, Shatov stressed that in the short term, the market will remain under pressure, primarily in the segment of small stones. The excess reserves have not yet been fully exhausted, and competition with synthetic diamonds will intensify. At the same time, prices for 1-carat diamonds may stabilize in the second half of 2026, subject to a recovery in consumer demand in the United States and China and a more disciplined supply policy on the part of manufacturers.

In the medium term, the market, according to his assessment, will become more polarized: the mass segment will increasingly compete with cheap alternatives, while large, rare and investment stones will retain their value and relative stability. The expert stressed that the current price correction is not a crisis of diamonds as an asset, but a natural stage of the industry's transition to a new structure of supply and demand.

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On the same day, the price index for 1-carat diamonds on January 1, 2026 fell by 10% compared to the same date in 2025 and amounted to 4.15 points, according to data from the American company Rapaport. Smaller stones, weighing 0.3 and 0.5 carats, became cheaper last year than others. 0.3 carat stones fell in price by 20% during the year and by 9% in December. Their price index is 0.84 points. The price index for 0.5-carat diamonds decreased by 26% and 6%, respectively, to 1.24.

Prior to that, on August 24, geographer Peter Krylov, Deputy Dean for Research at the Faculty of Natural Sciences of the State University of Enlightenment, spoke about the most expensive colored stones and the reasons for their value. According to him, emerald, sapphire, ruby and alexandrite remain among the most sought-after. Unique specimens can cost dozens of times more than typical ones, and historically significant minerals reach hundreds of thousands of dollars per carat.

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