Americans are buying more diamond jewelry than ever before, but prices for most polished gems are falling.
Five years ago, the diamond industry’s biggest worry was being forgotten by millennials, who — the theory went — didn’t covet sparkly gems the way their parents had.
The concern turned out to be mostly unfounded, but the reality is almost worse. While Americans are buying more diamond jewelry than ever before, most polished diamonds are getting steadily cheaper. The lower prices and a glut of the type of stones that go into a discount-store engagement ring or pair of earrings have pushed the global diamond trade into crisis.
At the center of the pain are the middlemen who cut, polish and trade the world’s diamonds. Their profits evaporated as polished stones lost value, banks tightened financing, and top producer De Beers held firm with prices it demands for the rough diamonds it digs up.