Natural diamonds have seen a dramatic decline in value, losing over 50% of their worth in the past five years, with the average price of a 1-carat stone now at $3,898 compared to $8,007 in 2021, according to the Rapaport Group.
The Diamond Standard Index recently hit a record low of 2,490, reflecting the pressures from an oversupply of mined diamonds and the growing market for lab-grown alternatives. Lab-grown diamonds, which can be priced up to 90% lower than their natural counterparts, are increasingly favored by consumers, particularly in engagement rings, where they accounted for 61% of sales in 2025.
This trend is expected to continue, with the lab-grown diamond market projected to reach nearly $92 billion by 2034. Industry leaders like De Beers are attempting to stabilize prices by reducing production, including a two-year halt at its Venetia mine.
Analysts suggest that companies like Signet Jewelers, which are adapting to the lab-grown trend, may benefit, as lab-grown diamonds yield higher profit margins compared to natural stones. However, investing directly in diamonds remains problematic due to the lack of a standardized market and liquidity issues, leading experts to recommend investing in related stocks instead