Q2 2026 Diamond Market Report

Executive Summary

Q2 2026 showed a diamond market under pressure, but not in one simple way.

The quarter began with buyers already cautious because of tariffs. Location, timing, and final cost remained important parts of the buying decision, especially for goods moving into the US. The US-Israel-Iran war then added more friction to the trade, affecting confidence around key routes through Israel and Dubai.

Natural diamond prices continued to move lower, but the pressure was uneven. The Natural Diamond Index decreased by 3.27%, while the Natural Round Index remained stable, increasing by 0.44%. The pressure was much clearer in Fancies, with the Natural Fancy Index decreasing by 7.2%.

The same pattern appeared in the US. The US Natural Diamond Index decreased by 3.76%, while the US Round Index remained almost completely stable, decreasing by only 0.1%. The US Fancy Index decreased by 7.64%, making Fancies the main source of price pressure in both the global and US markets.

The US market was more volatile than the global market. US 0.50ct VS+ I+ prices increased, while that same category was broadly stable globally. In 1ct VS+ I+, the US was also more stable than the global market, even though prices did not increase. At the same time, 2ct VS+ I+ saw a much larger price decrease in the US than globally, showing that location alone did not protect every category.

Lab-Grown prices continued to move lower in Q2, but the decline was less sharp than in Q1. The Lab-Grown Diamond Index decreased by 6.28%, with the Lab-Grown Round Index down 7.68% and the Lab-Grown Fancy Index down 5.67%.

This shows the main story of Q2: the market was still trading, but it was trading more carefully. Shape, size, location, supply, and confidence all changed the outcome.

A Market Already Under Pressure

Q2 began with the industry still carrying the impact of tariffs.

As we saw in 2025, tariffs did more than add cost. They changed the way buyers thought about where goods were located. A stone already in the US could trade differently from a similar stone outside the US, because bringing goods across borders came with more questions, more risk, and less certainty.

That behavior continued into Q2.

US buyers were still thinking carefully before buying: Where is the stone located? What will the final cost be once it arrives? Could tariffs change by the time the diamond reaches the US? Will shipping, customs, or timing affect the deal? Is there still enough margin left?

Tariffs did not only affect pricing. They affected confidence.

The pressure was also visible in India. Reuters reported in April that India's gems and jewelry exports fell to a five-year low, with shipments to the US almost halving after US tariffs disrupted trade. Polished diamond exports also fell to their lowest level in more than two decades.

This set the tone for Q2. The market was still trading, but it was trading carefully.

The War Added Friction to the Trade

Then the US-Israel-Iran war added another layer of uncertainty.

For the diamond industry, this was not only a geopolitical event. It affected the region through which a meaningful part of the trade operates. Israel remains an important diamond trading center, and Dubai is a major hub for goods moving between manufacturing centers, suppliers, and buyers.

When those routes become more complicated, the market feels it quickly. Diamonds depend on secure movement, reliable couriers, insurance, and trust. If flights, courier routes, or insurance conditions become less predictable, buyers and sellers become more cautious.

That helps explain the mood of Q2. The market did not freeze, but it became more careful. Buyers were more likely to focus on goods that were easy to price, easy to compare, and easier to move.

Reports from India also showed that the conflict was affecting the trade. The Southern Gujarat Chamber of Commerce and Industry warned that Surat's diamond industry was feeling pressure from reduced demand from Israel and the US, and higher freight and insurance costs.

So Q2 was not only about demand and supply. It was also about how easy, or difficult, it was to move goods with confidence.

The Natural Decline Was a Fancy Decline

The Natural Diamond Index decreased by 3.27% in Q2, close to the 3.6% decline seen in Q1. But the headline number hides the real story.

Rounds prices remained stable, increasing by 0.44%. Fancies prices decreased by 7.2%.

The same pattern appeared in the US. The US Natural Index decreased by 3.76%, but US Rounds Index stayed stable with a small decrease of only 0.1%, while US Fancy Index decreased by 7.64%.

This shows where the pressure really was.

Rounds prices held steady because market demand continued to support them during Q2. Fancies prices, on the other hand, did not see the same level of demand support. In previous periods, Fancies had held up better, but in Q2 they started to catch up to the price decreases that Rounds had already seen earlier.

This continued the Q1 pattern, but it became clearer in Q2. In Q1, Rounds prices were already more stable than Fancies, with the Round Index down 1.3% and the Fancy Index down 6.2%. In Q2, Rounds prices became even more stable, while Fancies stayed under price pressure.

The Natural market did not weaken evenly. The decline was a Fancy decline.

The US Was Volatile

In Q1, the US market was clearly weaker than the global market. The US Natural Index declined by 8.5%, compared with 3.6% globally. Much of that US pressure came from tariff uncertainty and a more hesitant buying environment.

Q2 was different.

US prices still moved more than the global market, but it was not weaker across every category. This is one of the most important changes in the quarter.

In 0.30ct VS+ I+, US prices decreased by 2.87%, while supply rose sharply. This was a clear pressure point. Buyers had more choice, and that allowed prices to decrease slightly.

But in 0.50ct VS+ I+, US prices increased by 3.51%, while global prices remained stable, increasing by 0.94%.

In 1ct VS+ I+, US prices decreased by 2.6%, while global prices decreased by 3.42%.

This shows that the US market was not simply weaker. It became more selective. Some categories softened as supply increased, while others remained stable or moved higher when supply tightened.

That is a major shift from Q1. The US moved from broad weakness to category-specific strength and weakness.

Stability Moved Higher Up the Market

Larger Natural goods prices remained more stable than most other areas in Q2, but the picture was not the same across every size or location.

3ct VS+ I+ showed the least movement. Globally, prices were stable and decreased by only 1.28%. In the US, prices decreased by 2.05%, showing slightly more decline than the global market.

2ct VS+ I+ prices were stable globally, but weaker in the US. Globally, prices decreased by 1.61%, with supply increasing only 2.4%. In the US, the decline was larger, with prices down 6.1% while supply increased by 39%.

This means we should be careful not to speak about larger goods as one group. In Q2, 3ct prices remained stable both globally and in the US, while 2ct prices were stable globally but came under more pressure in the US. This made the 2cts and 3cts more mixed than it looked in previous quarters.

Lab-Grown Kept Falling, But Slower

Lab-Grown prices continued to move lower in Q2, but the decline was less sharp than in Q1.

The Lab-Grown Diamond Index decreased by 6.28% in Q2, compared with a 9.3% decrease in Q1. Prices were still under pressure, but the pace of the decline slowed.

The split between Rounds and Fancies also looked different from Natural diamonds. In Natural, Fancies saw the sharper decline. In Lab-Grown, Rounds decreased more, falling 7.68%, while Fancies decreased 5.67%.

This shows that Lab-Grown followed its own pattern in Q2. The category remained highly competitive, with buyers still able to compare many similar stones and push toward lower prices. That kept pressure on the market, especially in Rounds, where comparable options are easier to find.

Q2 did not change the direction of Lab-Grown pricing. Prices continued to fall, but the drop was more measured than in the previous quarter.

Key Takeaways

The US is becoming less of a “premium location” and more of a category-by-category market

In 2025, having goods already located in the US gave suppliers a clearer advantage because tariffs made cross-border buying more complicated. In Q2, that advantage became less automatic. Some US categories still performed better than the global market, especially 0.50ct VS+ I+. In 1ct VS+ I+, the US was also more stable than the global market, even though prices did not increase. At the same time, other categories came under more pressure, especially 2ct VS+ I+.

This means location still matters, but it is no longer enough on its own. A US-located stone is not automatically stronger just because it is already in the US. Buyers should still compare it against global pricing, and suppliers should be careful not to assume that US inventory can always hold a premium. In Q2, the market rewarded the right category in the right location, not location alone.

Categories that looked stable before can change quickly

Q2 showed why it is important to stay close to the market. Categories that were steady in one period may not stay that way in the next. 2ct VS+ I+ goods had been one of the more stable areas in previous periods, but in Q2 they showed more pressure, especially in the US as supply increased. At the same time, 3ct VS+ I+ remained broadly stable.

This does not mean 2ct goods became weak. It means the market can shift quickly, even in categories that previously looked steady. Buyers and suppliers need to keep checking current pricing, current supply, and current demand instead of relying only on what was true last quarter. In a selective market, yesterday's stable category can become today's pressure point.

Conclusion

Q2 2026 showed a diamond market under pressure, but not evenly.

The quarter began with buyers already cautious because of tariffs, and that caution deepened after the US-Israel-Iran war added friction to trade through Israel and Dubai. Movement, timing, insurance, and confidence all became more important parts of the buying decision.

Inside the Natural market, the pressure was clearly split. The Natural Diamond Index decreased by 3.27%, but the Natural Round Index remained stable, increasing by 0.44%. The Natural Fancy Index decreased by 7.2%, showing that Fancies carried most of the decline. The same pattern appeared in the US, where the US Round Index was almost flat, decreasing by only 0.1%, while the US Fancy Index decreased by 7.64%.

The US market was more volatile than the global market, but it was not weak everywhere. 0.50ct VS+ I+ performed better in the US than globally, while 1ct VS+ I+ was more stable in the US than globally. At the same time, 2ct VS+ I+ showed a much larger decline in the US than globally, proving that location alone did not protect every category.

Larger goods also need to be read carefully. 3ct VS+ I+ remained stable both globally and in the US, while 2ct VS+ I+ was stable globally but weaker in the US.

Lab-Grown continued to move lower, with the Lab-Grown Diamond Index down 6.28%, although the decline was less sharp than in Q1.

The main lesson from Q2 is that the market cannot be understood through one headline number. Shape, size, location, supply, and confidence all played a role in how prices moved. The market was still trading, but it was trading more carefully, and not every category was treated the same.