(Kitco News) - Diamonds may be forever, but their value has dropped sharply in recent years, making them a more complicated investment than gold—especially in secondary markets.
In a recent interview with Kitco News, Tobina Kahn, President of the House of Kahn Estate Jewelers, said that with gold prices holding above $3,300 an ounce, the metal is now worth more than most smaller precious stones.
“For years, the stone was always the most valuable part of the piece. This is a trend I have never seen before in my career. We are in uncharted waters here, and I don’t think this trend ends because it's hard to see how gold prices go down.”
Kahn noted that while store traffic has eased slightly from April and May, they continue to see a steady stream of customers selling broken and unwanted jewelry. However, due to the sharp price drop, smaller stones are often returned to sellers.
The diamond market is seeing a significant shift as cheaper lab-grown stones replace natural ones.
Paul Zimnisky, a leading independent diamond industry analyst, told Kitco News that since 2022, diamond prices have fallen about 35%.
“A hangover from the euphoria in 2021 and 2022, a severe luxury recession in China, and competition from lab-diamonds have all led to the recent price weakness. Year-to-date 2025, prices have stabilized and are up a low-to-mid single-digit percentage,” he said. “With diamonds, the resale market is more complex than, say, gold because they are not fungible, and prices vary greatly by size and quality. With lab-grown diamonds, there’s virtually no buy-back market since wholesale prices for new goods are already so low.”
Despite weak resale values for smaller stones, Kahn said there is an upside. With gold above $3,300 an ounce, some customers are selling family heirlooms for cash while keeping the diamonds for new, smaller pieces.
“At lower prices, clients have been reluctant to sell, but at $3,000, sentimentality has gone out the window. Because of tariffs, consumers are facing higher prices and they are selling their gold to make some money,” she said. “With some heavy-duty, bulky gold pieces you could probably keep the diamonds and make 10 pairs of earrings from it. At the end of the day, you will have the money from the gold and still have something to remember your loved ones by.”
While smaller stones have lost significant value, larger-carat diamonds are holding steady.
Kahn added that buyers are slowly returning, especially ahead of the year-end holidays.
“For every three customers we see, there is one interested in buying,” she said. “Gold prices are elevated, but the consolidation we have seen has allowed consumers to get comfortable with these levels, at least for now. Some people are buying now because they know prices will only be higher by the end of the year. I think it’s possible we could see $4,000 gold by the end of the year and, if that happens, there will be some sticker shock in the jewelry market.”
Zimnisky expects sharper price segmentation in holiday jewelry sales.
“For instance, jewelry priced in the low-$100s and below set with lab-diamonds and plated or low-karatage gold or silver, and then price points in the $25,000 area and up set with natural diamonds and higher-karatage solid gold. I expect the middle market to be softer,” he said.
