The global diamond industry recovered after three tough years defined by geopolitical drama, altering trade routes, and a steep decline in consumer confidence. While certain areas still see instability in prices, demand is compounded and the recovery seen, especially in the primary luxury markets, is continuing to rise. While the industry professionals see the recovery as uneven, the growth is plain to see and signals a slow but important turnaround.
According to senior figures in the international jewelry trade, the renewed interest in diamonds is closely linked to improving economic sentiment and changing purchasing patterns. Natural diamonds, despite facing competition from their synthetic counterparts, continue to hold the largest share of global engagement ring sales. But the gap is shrinking. In major Western markets, lab grown diamonds are gaining momentum, especially among younger buyers who prioritize size, clarity, and affordability over tradition.
The pricing gap between the two sectors tells the story clearly. While prices of smaller natural diamonds particularly those under one carat fell sharply over the past year, lab grown diamonds became significantly cheaper due to technological improvements and increased supply. This dual movement has reshaped the choices available to consumers, who now compare the value proposition more carefully than ever before.
At the same time, the increasing value of gold, which is an integral part of most diamond ornaments, has seen its costs go dramatically upward. Over the course of the year, the world value of one gold ounce jumped over 25% due to the ongoing inflation and the disturbances in the world’s politics made worse by the purchase of gold by the central banks. Therefore, analysts argue that the increase in the price of gold has to some extent countered the decrease in price of diamonds that has been expected by the consumers. In many cases, the total price of an engagement ring has remained relatively high despite softer diamond rates.
The industry’s recovery is particularly complex in Israel, which has long been one of the world’s major hubs for polished diamonds. The sector suffered significant damage following the outbreak of the Ukraine war in 2022, which disrupted traditional supply routes and led to sanctions that changed the flow of rough stones. The October war brought additional challenges: a drop in tourism, fewer international visitors, and reduced flights all of which affected local trade activity. Many Israeli diamantaires were forced to diversify into related fields such as gemstones and finished jewelry.
Yet the year has brought a cautious sense of optimism. While the market has not fully returned to pre-crisis levels, exporters report modest improvement in global orders and better movement of goods. Surprisingly, jewelry purchases within Israel even rose during periods of military tension with Iran. Experts at Golden Bird Jewels note that this rise is linked to “emotional compensation”: during uncertain times, many consumers seek meaningful purchases that symbolize stability, commitment, or personal comfort.
An unexpected diplomatic development also caught the attention of the local industry. For the first time, an Israeli delegation participated in a major international diamond and jewelry convention held in Doha, Qatar. Although Qatar formally joined the Kimberley Process in 2021 technically allowing Israeli traders access, the actual flow of goods in the Gulf region has long occurred through Dubai’s DMCC exchange. The participation in Doha signals a subtle but significant change in regional economic dynamics, even amid ongoing political complexity.
Industry experts report that the recovery is at a tender stage. Global markets are still very much at the mercy of inflationary trends, shipping issues and also that of unstable politics. But what we are seeing is that the diamond sector is turning around which is in large part due to innovation, changing consumer preferences, and the rise of new markets in Asia and the Middle East.
The political and economic issues which play into trade, the shift between natural and lab grown stones as competitors, and the issue of gold price stability in our fields. Also it is put forth that the diamond industry which extends to world wide and internal Israeli markets is in the beginning of a new stage which is somewhat hopeful out of a very turbulent time.
This article was written in cooperation with goldenbirdjewels