Why Are Diamonds Losing Their Spark With Constant Price Falling?

Gold and silver have outshone diamonds in the past few years. Prices of both gold and silver are touching record highs. But the price of natural diamonds and lab-grown diamonds is falling. The price of natural diamonds has fallen by 30% in the last three years, and lab-grown diamonds are down by 70% in the same period.

What is the reason for the price of diamonds falling?

Both natural diamonds and lab-grown diamonds have been consistently falling for the last three to four years. 

Here are the main reasons for the downfall-

Natural Diamonds

1. Natural Diamonds face stiff competition from lab-grown diamonds, which are 70% to 90% less expensive when compared to real ones.
2.  Natural Diamonds are mined, which is not good for the environment, and people are more conscious now. Buyers want eco-friendly and conflict-free products that can be used without guilt.  
3. Millennial and GenZ buyers are going for lab-grown diamonds due to the higher price of natural 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 Production in China and India is the main reason for the falling prices of lab-grown diamonds.
2. Lab-grown diamonds can be produced in weeks, unlike natural diamonds, which take millions of years to form. So the supply is infinite, and the demand is decreasing.
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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