Diamonds have long been seen as a symbol of wealth and luxury. Many buyers assume that, like gold, they will hold value over time. But in reality, diamonds often lose value sharply when sold, raising questions about whether they are worth the high price at purchase.
Recent data shows that diamond prices have fallen to their lowest level this century. The diamond price index has dropped from around 8,500 levels to nearly 3,500, according to market data. This decline has come even without a major global recession or geopolitical shock, making the fall more striking.
When consumers buy a diamond, they are not just paying for the stone. The price includes branding, marketing, retailer margins, and making charges. Unlike , which has a clear daily rate, diamonds do not have a standard benchmark price that buyers can easily track.
This makes pricing less transparent. Two similar diamonds can be sold at very different prices depending on where they are bought from, which adds to the high cost at the retail level.
The biggest issue with diamonds is the resale value. Unlike gold, which can be sold easily at market-linked prices, diamonds do not have a strong resale market.
When a buyer tries to sell a diamond, they often get a much lower price than what they paid. In many cases, jewellers either do not buy back diamonds or offer rates far below the purchase value.
This gap between buying and selling price makes diamonds a poor investment option.
One of the biggest reasons behind falling prices is
These diamonds are chemically, physically and optically identical to natural diamonds. The key difference is in how they are made. While natural diamonds take millions of years to form, lab-grown diamonds can now be produced in about 14 hours.
The cost of producing these diamonds has fallen sharply, by nearly 90% since 2015. Today, a lab-grown diamond can be made for under $300.
This has disrupted the market. Lab-grown diamonds now account for about 45% of engagement ring sales in the US, showing how quickly consumer preference is changing.
As cheaper alternatives become widely available, the pricing power of natural diamonds has weakened.
For decades, diamond prices were supported by controlled supply and strong marketing, which helped create a perception of rarity and long-term value.
However, lab-grown diamonds have challenged this model. When a similar product is available at a much lower cost, it raises questions about the actual value of natural diamonds.
Younger buyers are also becoming more price-conscious and are moving away from spending heavily on traditional diamond jewellery.
In contrast, gold has continued to perform as a store of value. Gold prices are around $4,814 and have risen more than 100% over the past two years.
Gold has a clear pricing system, strong liquidity, and can be sold easily across markets. This makes it a preferred choice for both jewellery and investment.
Diamonds, on the other hand, lack these features, which limits their ability to deliver returns.
The sharp fall in diamond prices and weak resale value highlight an important point. Diamonds may hold emotional or aesthetic value, but they do not work well as an investment.
For buyers, this means that spending on diamonds should be seen as a consumption decision, not a financial one.
As the market continues to change with new technology and shifting preferences, the gap between gold and diamonds as investment assets is becoming clearer.