A diamond may be forever, but its price is not.

As investors have discovered, finest-quality diamonds have plummeted by almost 30 percent in the past year. The same D-flawless (best quality), one-carat round stone that sold for $63,000 in early March of last year now is priced at $45,000. In the past three months alone, the price has dropped about 17 percent.

To protect prices, De Beers Consolidated Mines Ltd., the South African company that controls 85 percent of the world's uncut diamonds, last week announced a sharp cutback in supplies. The allotment of New York dealers at the next London "sight," or sale, in March will be reduced by 60 percent.

Antwerp's share will be cut in half, and Tel Aviv -- where unemployment in the diamond-cutting industry is reported to be serious -- will get only 20 percent of its January ration. Reducing the supply lessens the pressure on dealers at these invitation-only sales where they traditionally must buy or risk not being invited back.

The cartel's last major cut in supplies occurred during the 1974 recession. when the price of diamonds also dropped 30 percent. Since then, investment-grade stones have appreciated 500 percent. The biggest jump came in January and February of 1980, when speculators ran the price up by about 60 percent.

But even with a 30 percent drop between March 7 and now, prices on a year-to-year basis are still 10 percent to 20 percent above February 1980 levels.

Prices of commercial-grade diamonds -- those under one carat routinely used in jewelry -- did not skyrocket last year along with investment-grade stones. Over the year, they went up 5 percent to 10 percent, according to Miriam Furman, executive editor of National Jeweler. Failures in both the retail and wholesale jewelry industry have occurred, but the situation is not as bad as has been depicted by some publications.

There has been no panic selling by investors, according to Iaac Jaroslawicz, executive vice president of NYDEX, a diamond brokerage firm. A veteran of Wall Street, he said diamond investors think of the gems, as a long-term investment and are not affected by short-term cycles.

Furman said De Beers' action would serve to firm up a soft jewelry market and cause prices to inch up. As for the investment market, Jaroslawicz expects a turnaround but no run-up as spectacular as that of last year while interest rates remain high.