The diamond market’s May 2025 performance wasn’t just volatile it revealed a fundamental rewriting of valuation principles. In this dive, we dissect every seismic shift with data-driven analysis, expert insights, and actionable strategies for jewelers, investors, and traders.

The Perfect Storm –

Geopolitical Tremors Sanctions on Russian diamonds (30% of global supply) reached critical mass in May. The Kimberley Process Implementation Report confirmed a 22% YoY drop in Russian exports, squeezing mid-market goods. Meanwhile, Angola and Botswana ramped up production but couldn’t offset deficits in +3ct D-F goods (USGS Mineral Survey 2025).

Lab-Grown Domination MIT’s research confirms synthetics now hold 38% market share sub-2ct. The real shock? Their infiltration of the 3-5ct segment (up 17% MoM). Consumers perceive identical visual appeal at 30% cost (Gemological Institute of America: Lab-Grown Impact Study).

Generational Economics

Gen Z: Prioritizes "instagrammable" brilliance over paperwork perfection (Jewelers of America Consumer Report)

High Net Worth: Uses diamonds as inflation hedges – but only D-F +3ct stones (Wharton School Luxury Asset Analysis)

Round Diamonds –

Under 3.00ct:

Price Movement: Flat (±0.3%)

Why: Lab-grown cannibalization + shift toward "statement jewelry"

Opportunity: Recut inventory into halo settings using CaratX

3.00-5.99ct:

(Data aggregated from CaratX’s 18,000+ May transactions)

Carat Color Clarity Price Demand Surge

3.00-3.99 D-F VS1-SI3 +2.8% 41% MoM

4.00-4.99 D-F I1-SI2 +3.9% 67% MoM

5.00-5.99 D-E I1 +4.2% 83% MoM

The "Visual Premium" Phenomenon:

Stones with optimal light performance (GIA "Excellent" cut + <20% depth) outsold VVS-clarity goods 3:1

The Collapsing Tier: High-Clarity, Low-Color Goods

4ct J-M/VVS1: -4.5% (biggest drop since 2020)

Cause: Instagram-era buyers reject "paper-graded" stones with visible tint.

Fancy Cuts –

The 1.00-1.49ct Sweet Spot

Winners: Ovals & Radiants (E-F/VS1-VS2) → +4.5%

Losers: Asschers & Trilliants (D-E/IF-VVS) → -4.0%

Insight: "Designer engagement" demand drove gains for "face-up clean" stones

The 3.00-3.99ct Bloodbath

High-clarity goods (VVS-VS) plummeted -4.5%

Exception: SI3/SI2 with "hearts and arrows" patterns gained +3.2%

Use CaratX Clarity Override to identify eye-clean SI stones

The 4Cs Reborn – A New Valuation Framework

Cut > Color > Clarity > Carat

Cut: Accounts for 50% of perceived value (GIA data)

Clarity: SI2-SI3 now preferred if eye-clean (GIA Clarity Relevance Study)

The "Fifth C": Confidence

Provenance boosts resale value 18%.

CaratX Solutions –

User sold 4.28ct F/VS2 oval in 72hrs (17% above Rapaport)

Market Intelligence Suite -

Access predictive analytics for 200+ diamond categories.

Future-Proofing Your Business –

Inventory Shift:

Pricing Revolution:

Tech Stack Integration:

Sellers: Capitalize Now Join 3,800+ Traders on CaratX Download May Full Market Dataset

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Conclusion:

The May 2025 diamond market wasn’t just shaped by price fluctuations—it unveiled a deeper structural reset. From the collapse of high-clarity, low-color tiers to the meteoric rise of lab-grown and fancy cuts, the industry is evolving beyond the traditional 4Cs.

Image credit - Price Scope