Diamond prices are falling. But what happens when the stone no longer carries most of the value of a piece? For jewellers holding inventory bought at yesterday’s prices, the pressure is already real. For those willing to rethink how they buy, make and price their work, there may be an opportunity hiding in the decline.
Sell the work, not the stone
Move the value of a piece into what does not deflate. Hold as little stone inventory as you can, and make to order wherever possible.
That advice used to suit small bespoke studios. In 2026 it applies to most jewellers who sell diamonds, and not only lab-grown ones. Why? Because for most of the stones that go into everyday engagement rings and fine jewellery, the price has been falling for four years, and it is not obvious when that will stop.
So what happens to a jewellery business when its core material keeps getting cheaper?
Lab-grown diamond prices have fallen dramatically since 2022, and trade price lists show them falling again this year. Sources measure it differently, but nobody disputes the direction. Edahn Golan’s wholesale price list recorded a 26% drop across 2025, followed by year-on-year falls of 14% and 13% in the first two quarters of 2026. In mid-2018 a one-carat lab-grown stone traded at about $1,800 per carat. By mid-2026 it fetched around $80. Wholesale prices for 1- to 3-carat rounds did go up by about 2% in the third quarter, the first rise in years, but they are still lower than a year ago. Because lab-grown diamonds can be produced at scale, the category faces persistent supply-side pressure. But the effect on price varies by size, grade and market segment.
Natural diamonds are a different case, because no two of them are the same. A natural stone’s value depends on its carat weight, cut, colour, clarity, shape, certification and on what the market wants at the time. A headline figure for “natural diamond prices” is an average across very different goods, and it can hide categories moving in opposite directions.
The average has still fallen a long way. Analyst Paul Zimnisky estimates that wholesale prices for natural rough uncut stones are down around 50% from their highs in early 2022. In August, Golan reported polished natural prices 16% lower than a year earlier. De Beers cut its official prices in January for the first time in more than a year, and in July made some of the deepest cuts it has ever made. Its average realised rough price fell 32% in the first half of 2026.
Look beneath the average, though, and the picture splits. When De Beers reduced prices for 1- to 2-carat rough in January, it raised prices for stones of 5 carats and above in February. Smaller polished goods have taken the heaviest losses: the price index for 0.30-carat stones fell 1.1% in March and 28.6% year on year. Market analysts expect this pattern to continue, with larger natural stones holding up better and small polished goods remaining under pressure.
A rare, large, well-cut stone with strong certification may hold its value or even gain. A commercial-grade half-carat is far more likely to have lost ground.
For a jeweller, that creates two problems that rarely appear in the same meeting. One is discussed by whoever sets prices. The other usually surfaces only when someone looks at the stock figures.
The first is pricing. If a piece is priced as stone cost plus margin, every fall in the stone price pulls the ticket down with it. Average order value erodes without anyone deciding to cut it. Has anyone in your business ever proposed lowering the average sale? Probably not, and yet it may be happening anyway. Zimnisky has pointed out that Brilliant Earth’s average order value fell year on year for 16 quarters in a row. The company has not blamed stone prices, but Zimnisky thinks it is reasonable to assume they account for some of it.
The second is stock. Loose lab-grown diamonds held in inventory are exposed to depreciation risk, particularly when the market is falling faster than the stock can be sold. The longer it sits, the more it costs. With natural stones, it depends on what is in the drawer. Exceptional goods can be worth holding, and some jewellers buy them deliberately. But think of a parcel of commercial-quality natural stones bought for stock at the 2022 peak. What would it fetch at today’s prices? Some small retailers no longer hold loose stones at all and buy one from a dealer only after a client asks for it.
Making to order deals with the stock problem directly. When the stone is bought after the customer has committed, its cost reflects the market on the day of the sale, and nothing sits in a drawer losing value. Moving the value into design and workmanship deals with the pricing problem. Where a jeweller can maintain its price architecture, a lower stone cost can improve margin rather than forcing a lower ticket price.
The stone itself has not changed. It is just as beautiful as it was three years ago. What has changed is that, for most stones, its price no longer tells the customer what the piece is worth.
So the value has to be visible somewhere else: in the complexity of the design, the skill of the setting, the hours of handwork in every detail. That is the part of a piece that cannot be produced faster or cheaper next year.
Some workshops are already working this way. The Australian trade magazine Jewellery World reports that money saved on centre stones is increasingly going into heavier mounts, more intricate settings and bespoke work.
And if a customer took the stone out of your best-selling ring tomorrow, what would be left for them to pay for?
For many jewellers, not much. For decades the diamond carried most of the price, and the mount was often designed simply to hold it securely without drawing attention. Cheaper stones shift that balance. When the centre stone takes a smaller share of the budget, more of the customer’s money is free for design and for the skilled bench work that was cut back over the years to keep prices competitive.
It changes how customers choose, too. A certified stone can be compared line by line with near-identical stones from dozens of other sellers, and when they all look much the same on paper, the decision tends to come down to price. The setting is different. A customer cannot find the same design at a lower price somewhere else if it was drawn for them, or if its detail takes a level of skill few workshops can match. As stones become easier to buy and harder to tell apart, the intricacy of the design and the sense of owning something no one else has can become the reason a customer chooses one jeweller over another. For an engagement ring or a piece meant to be handed down, that matters more than a few points of colour or clarity.
Seen this way, falling diamond prices could be good news for the trade. Intricate design and fine handwork, which were often hard to justify on cost, become worth paying for again, and this could be the start of a renaissance for the craft at the heart of jewellery making.