Why Are Diamonds Losing Their Spark With Constant Price Falling?

Gold and silver have out performed diamonds in the past years. Rates of both gold and silver are climbing to new highs. But the price of natural diamonds and man made diamonds is dropping. The price of natural diamonds is down by 30% in the last three years and lab grown diamonds have decreased by 70% in the same time.

What is the reason for the price of diamonds falling?

Both natural and synthetic diamonds are seeing a drop in rates since last few years

Here are the main reasons for the downfall-

Natural Diamonds

1. Natural Diamonds face stiff competition from man made diamonds because they are 70% to 90% less dearer when compared to real ones.
2.  Natural Diamonds are mined and that is not good for the environs. People are more aware now than they used to be earlier. Users like eco friendly and conflict free products that can be used without culpability.  
3. Millennial and GenZ buyers are opting for man made diamonds due to the exorbitant price of real diamonds.
4. Demand from China has decreased by 60 to 70% due to the real estate crisis and low marriage rates. 
5. Jewellers and investors are moving towards gold and silver, which look like safe investments with good returns.

Lab Grown Diamonds

1. Huge over supply in China and India is the main reason for the falling prices of man made diamonds.
2. Lab-grown diamonds can be produced in weeks unlike natural diamonds which take millions of years to be made. So the supply is unlimited and the demand is down.
3. The competition at the manufacturing and wholesale levels is very high. Manufacturers are constantly offering discounts to survive in the market, which has led to a huge price drop.
4. The advanced manufacturing methods have further decreased the cost of production and led to a fall in the price of lab-grown diamonds.

Leading producers of natural diamonds and lab-grown diamonds are opting for cuts in production to maintain the demand and supply chain. But diamonds have really lost their sparkle as both sales and prices are dropping. We hope that the precious stone gets its sparkle back.

(Thumbnail Image source- CBC)

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