Why Natural Diamonds Still Shine — Navigating Price Dips and What's Next
Most jewellers and stone dealers will have noticed a significant correction in natural diamond prices and sales over the past 12 months. After two strong years of growth post-pandemic, prices have dropped—sometimes by as much as 40%. Even popular shapes like ovals have seen declines of around 10 to 15%. Several factors are behind these changes:
Laboratory Grown Diamonds
Over the past few years, lab-grown diamond sales have surged—especially in the bridal market. For many consumers, it’s a cost-driven decision: lab-grown diamonds offer the chance to buy a larger or higher-spec stone for the same budget as a smaller natural one. That price gap has played a major role in shifting demand.
Interest Rates
Another factor hitting jewellery sales more broadly is the rise in interest rates. Central banks have pushed rates up to around 5%, a sharp jump after more than a decade of near-zero levels. For many, that’s meant higher mortgage repayments and tighter monthly budgets—leaving less room for discretionary spending, including jewellery.
Sluggish Economy
Economic growth has been slow across much of the West and in key markets like China. With public confidence low and inflation still lingering, many consumers are thinking twice before making discretionary purchases — particularly on higher-value items like fine jewellery.
What are the prospects for natural diamonds in the coming months?
Sales Growth of Lab-Grown Diamonds Has Started To Stall
After rapid growth over the last few years, sales of lab grown diamonds are slowing down. While they remain popular, especially for budget-conscious consumers, some are beginning to question long-term value and resale potential.
Falling Prices of Lab-Grown Diamonds
The prices of lab-grown diamonds have dropped by as much as 90% since they first gained popularity. Stones that once cost thousands now trade at a fraction of the price — in some cases, a 1ct lab-grown diamond can wholesale for under £200, depending on the spec. As production costs have come down, and supply has increased, it's become harder for many retailers to turn a strong profit on lab sales.
Some retailers have responded by maintaining higher price points despite lower sourcing costs, while others are leaning more heavily into natural diamonds — where, even with the recent correction, there’s more room to preserve margin.
A Shift in Perception
In addition to price, recent developments are influencing how lab-grown diamonds are viewed in the market. The GIA has announced a new approach to grading lab-grown diamonds, dividing them into “premium” and “standard” categories — a move that clearly differentiates them from naturals. While this offers more clarity for consumers, it may also signal a shift in positioning that could affect how lab-grown stones are perceived in terms of value and prestige.
Natural diamonds are more affordable and accessible than they’ve been in years
The recent price corrections have made natural diamonds more attainable than at any time in recent history. This shift allows customers to be more selective, choosing higher-spec, better-cut stones without compromise. For retailers, this presents a genuine opportunity to promote natural diamond sales by highlighting quality and value.
Final Thoughts
In conclusion, natural diamonds are here to stay. While prices have come down, they still hold a unique place in consumer minds and the market. You won’t find Cartier or Tiffany promoting lab-grown diamonds, and when was the last time you saw an actress on Oscar night wearing anything but natural stones?
With lab-grown diamonds facing increased supply and price pressure, many retailers are finding that natural diamonds still offer stronger opportunities to maintain healthy margins.
So, what are you doing to promote natural diamonds?