The U.S. diamond wholesale market is showing mixed signals, with consumer demand for diamond jewelry remaining steady while retailers are pulling back on purchases. In July, consumer sales of natural-diamond jewelry and loose stones grew by 8.5% year-on-year, according to data from Tenoris, a market research firm. Despite this uptick in sales, dealers report a notable slowdown in purchases from retailers, pointing to shifting buying habits.
Retailers are becoming more cautious in their approach to inventory management. Falling diamond prices have made many jewelers hesitant to hold large stocks, fearing that the value of their inventory could decline in the coming months. As a result, more retailers are turning to memo deals—arrangements where diamonds are provided on consignment rather than being purchased outright—to reduce risk.
David Bonaparte, CEO of Jewelers of America (JA), attributes this disconnect between strong consumer demand and slower dealer activity to retailers’ existing inventory levels. “Higher-end luxury stores are seeing stable diamond sales, while larger, higher-volume companies are experiencing more challenges,” Bonaparte explained. “Dealers in New York are quiet, likely because retailers are already well-stocked. There’s less buying at the moment, even with strong sales, because inventory levels are sufficient. But that’s typical for the summer.”
Data from RapNet, an industry-leading diamond trading platform, shows that U.S. diamond inventories have increased modestly over the summer. From March 1 to September 1, the number of U.S.-based round diamonds across various carat ranges rose by 32%, from approximately 21,200 to 28,000 stones. This increase reflects the stockpiling of diamonds in anticipation of future sales.
In contrast, the rise in inventory has been much steeper in India. Over the same period, the number of diamonds listed on RapNet surged from 60,000 to nearly 160,000 stones. This sharp increase followed the resumption of production at Indian factories, which had previously halted rough diamond imports during a voluntary freeze. The inventory gap between the U.S. and India is now at its widest point in two years, with U.S. dealers able to be more selective in accumulating stock.
A Buyer’s Market
The current low price levels have also created opportunities for retailers to make strategic purchases, said Andrew Rickard, Vice President of Operations at RDI Diamonds, a wholesaler based in Rochester, New York. “We’re seeing retail buyers come to the table looking for deals,” Rickard noted. Demand is particularly strong for 1- to 4-carat diamonds in F to J colors and VS1 to SI2 clarity, especially in popular shapes like round, oval, radiant, cushion, and marquise.
Rickard emphasized that retailers who only buy on demand—waiting until they have a specific customer request—are missing out on potential gains. “Those who like to own more inventory, rather than relying on memo deals, are benefiting from the soft market by purchasing fast-moving stones at lower prices,” he explained.
There has been a modest uptick in activity as the holiday season approaches, though the improvement is more subdued than in previous years. Nilesh Sheth, President of New York-based diamond supplier Nice Diamonds, observed that retailers are taking a conservative approach to stocking up. “Retail stores are placing orders for stock cautiously,” Sheth said. “They’re relying on short-term consignments and calling in diamonds only when they need them.”
Optimism for the Fourth Quarter
Despite the current slowdown, many in the industry expect conditions to improve by the fourth quarter. “Whatever you think of the current market, Christmas is coming,” Rickard of RDI said. “There will be a season one way or another, and those who are better prepared will be in a stronger position to meet the increased demand.”
As the U.S. diamond market navigates these contrasting trends—rising consumer sales on one hand and retailers’ cautious inventory strategies on the other—industry insiders are looking ahead to the crucial holiday season, where well-prepared retailers may capitalize on a rebound in demand.
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