Natural Diamond Prices Plummet to Record Lows Amid Lab-Grown Surge

Natural diamonds have suffered a severe valuation decline over the past half-decade, with average prices dropping by more than 50%. According to data from the Rapaport Group, the typical 1-carat stone now commands approximately $3,898, a stark contrast to the $8,007 average recorded in 2021.

The Diamond Standard Index, a benchmark for investment-grade diamonds, touched a historic low of 2,490 in early August and remains徘徊 just above the 2,500 mark. Industry executives attribute this downturn to a convergence of factors, including a significant oversupply of mined stones and the rapidly expanding lab-grown diamond sector.

“There’s a lot of doom and gloom about natural diamonds,” Cormac Kinney, CEO of the Diamond Standard, told CNBC. He noted that the market was burdened by excess inventory from 2023 and 2024, followed by declining sales as consumers shifted toward人造 alternatives.

Lab-grown diamonds, which possess identical chemical and physical properties to their mined counterparts but are created through heat, pressure, or gas decomposition, offer a compelling price advantage. A CNBC analysis of Brilliant Earth’s online marketplace found that a nearly colorless, excellently cut lab diamond with very slight inclusions costs around $450. In comparison, a natural stone with similar specifications ranges from $2,800 to $3,200. Lab-grown gems can be priced up to 90% lower than natural diamonds, depending on size, cut, and color.

This affordability has driven a dramatic shift in consumer behavior, particularly in the engagement ring market. Data from The Knot’s 2026 Real Weddings Study indicates that lab-grown center stones accounted for 61% of all engagement ring sales in 2025, a 239% increase from 2020 levels. The global lab-grown diamond market is projected to swell from $29.46 billion in 2025 to nearly $92 billion by 2034, according to Fortune Business Insights.

Cory Schifter, owner of Casale Jewelers, explained that lab-grown stones allow consumers to allocate funds elsewhere. “They’re able to take the extra money that they didn’t spend on the 5-carat natural and put it towards their wedding and maybe buy a house,” Schifter said.

In response to the price collapse, major producers are attempting to tighten supply. De Beers Group announced in July that it would suspend operations at its Venetia mine in South Africa for over two years. Additionally, at least two other mines have announced permanent closures in 2026. Kinney suggested these disruptions could signal the start of a recovery for certain diamond qualities.

For investors, analysts recommend focusing on publicly traded jewelry companies rather than purchasing physical stones. Raymond James analyst Rick Patel highlighted Signet Jewelers, noting that lab-grown diamond fashion jewelry generates roughly three times the average unit retail of non-diamond fashion items. Data from Gordon Brothers suggests lab-grown diamonds yield gross margins of 60% to 65%, significantly higher than the 40% to 45% margin on natural stones.

Signet shares have risen 21% year-to-date, while Pandora, which also offers lab-grown options, is up nearly 19%. However, industry experts warn against treating diamonds as financial assets due to illiquidity and the lack of a standardized spot market. Schifter advised, “You shouldn’t be buying a diamond thinking that there’s a financial investment [aspect] to it. Go invest your money in silver or even the S&P 500.”