Diamond analyst Paul Zimnisky notes the 2025 holiday season faces uncertainty, yet solid US growth and possible tariff relief for diamonds could support demand.
Given all the persistent micro and macro noise, uncertainties for this upcoming holiday season (underpinned by Christmas and New Years) are unusually high.
In the US, which represents over half of global diamond jewellery demand, the market is battling with uncertainties ranging from tariffs interfering with inventory positioning to a government shutdown which will impact consumer spending (e.g. due to furloughing of some federal employees).
On the other hand, a tariff exemption on the import of polished natural diamonds into the US seems to be very much on the table – especially as it pertains to ever-important trade partner India. And, economically, the US has clearly pivoted to a monetary easing cycle with the Federal Reserve expected to cut its interest rate target further going into 2026 which will theoretically boost asset valuations which could consequently boost luxury consumer sentiment.
Notably, there is a lot of political contention under President Trump in the US, as such there is an influential narrative led by many major left-leaning media outlets that the US economy is struggling or will underperform because of Trump. However, the reality is the US economy has performed quite well – at least year-to-date.
In late-September, intergovernmental economic organisation the Organisation for Economic Co-operation and Development (OECD) raised US real economic growth expectations to 1.8% from 1.6% in June – the global growth forecast was also hiked to 3.2% from 2.9%. A report cited “more resilient” growth driven in part by industrial production and “strong AI-related investment.”
Multiple global stock markets, including the US, are sitting at or around all-time highs, gold and bitcoin are at all-time highs and home prices in a lot of markets in the world are at all-time highs. Consequently, the wealth effect has the potential to be quite positive for jewellery consumption the remainder of the year.
In September, Signet Jewelers, America’s largest jewellery conglomerate, moderately raised full year’s sales guidance following a solid fiscal Q2 (ending 2nd August) and optimism for holiday 2025. At the time, management noted positive “momentum” seen in Q2 was “continuing” into Q3 –driven by growth in both bridal and fashion jewellery categories. As it stands, Signet is forecasting sales of $6.7-6.8 billion for the year ending January 2026 – using the mid-point implies year-over-year growth of about 1%.
Signet’s much smaller competitor, digitally native Brilliant Earth, is guiding full-year sales growth of 2.5-4.0% for calendar year 2025 following an August guidance boost. Management noted an overall “acceleration in the business” and a “notable rebound in engagement ring customers” at the time.
Whether natural diamonds or LGDs outperform in the coming months could be impacted by inventory availability in the US.
It is quite clear that the American trade front-loaded natural diamond inventory purchases in Q2 in anticipation of tariff risk, however, whether the amount of stock on hand is sufficient to fully meet holiday season needs is a lot more difficult to ascertain. Inevitably, it is difficult to sell diamonds if stock positions are short.
On the other hand, almost no one in the trade is expected to be understocked lab-grown for the foreseeable future because the inventory is so available and inexpensive – even with the tariff impact.
Retailers and jewellery manufacturers seem to be aggressively ramping up fashion LGD merchandise for the holiday season. For example, Signet has said that is stocking 3-4 times more fashion LGD merchandise year-over-year, primarily in the sub-$500 “gifting” price points.
Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis and forecasts of the diamond industry please consider subscribing to his State of the Diamond Market, a leading monthly industry report; an index of previous editions can be found here. Also, listen to the Paul Zimnisky Diamond Analytics Podcast on Spotify or Apple Podcasts for exclusive full-length conversations with special guests from the gem and jewellery industry. Paul is a graduate of the University of Maryland’s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be followed on X @paulzimnisky and on YouTube @paulzimnisky.
Paul will be giving a keynote presentation at the Prospectors & Developers Association of Canada (PDAC) Convention in Toronto, Canada on 2nd March, 2026.
Disclosure: At the time of writing Paul Zimnisky held a long equity position in Brilliant Earth Group and Newmont Corp. Paul is an independent board member of Lipari Mining Ltd, a publicly-traded Canadian company with an operating diamond mine in Brazil and a development-stage asset in Angola. None of the above constitutes investment advice, please read full disclosure at www.paulzimnisky.com.
