While demand for diamonds has slumped of late, their lab-grown alternatives have actually been increasing in popularity with millennials and Gen Zers looking for a different (read: less expensive) way to express their commitment and love.
According to new research, the classic rocks are falling out of fashion with millennials, who are increasingly opting for a more diverse range of gemstones when it comes to choosing an engagement ring.
Millennials would rather spend their money on experiences rather than material things. They would rather take a vacation in another part of the world than to buy expensive jewelry, for example. As such, they save their money for these experiences and not for things they can own, except for gadgets.
The Cons of Buying Diamonds
Human rights violations - Some workers are subject to horrific and dangerous mining conditions. Debt - Many young adults are saddled with debt and overall, millennials earn 20% less than baby boomers did at the same stage of life.
The price of a 3-carat lab-grown diamond has dropped by more than half between Q1 2021 ($20,565) and Q1 2023 ($9,305). “You are starting to hear some retailers come out and say they are less motivated to sell lab-grown because the prices continue to fall.
But why is the resale value only 90% of the prevailing price? Experts say this is because unlike gold, diamonds cannot be melted, cut or polished to make another piece of jewellery. (The images for 4Cs of diamond have been sourced from Trend report KISNA The Eternal sparkle - Your Buying Guide.)
Like a car, a diamond is a depreciating asset since it loses a large portion of its value the second you buy it. Think about gold and silver. The market for them is very liquid and fungible since you can store coins, sell them at any time or even trade them later on.
The fact is that diamond jewelry is still wildly popular. People still desire beautiful, natural diamond engagement rings and fashion jewelry. While it is true that diamond jewelry took a large hit in 2020 (as most industries did), it is expected to fully recover by 2023. Let's take a look at diamond engagement rings.
Diamonds are also inflation proof, just like other physical commodities, such as gold, silver, and real estate. However, unlike other physical commodities, diamond jewellery is a more movable and durable investment.
Today, more than 80 percent of American brides get a diamond engagement ring before walking down the aisle, and the industry is a whopping $13 billion dollar business worldwide.
A total of 76% of diamond jewelry purchases by Gen Z consumers were branded, compared with 64% for Gen X and only 38% for Baby Boomers. In addition, affluent consumers and those purchasing diamond jewelry for themselves were more likely to desire brands.
Over the last 35 years, natural diamonds have shown to appreciate in price by approximately 3% on average every year. The cost of lab grown diamonds on the other hand continues to decline due to mass production. Only natural diamonds retain inherent value over time making them an investment and an heirloom.
Overall, the answer is yes. A diamond's value appreciates over time. How much or how quickly it appreciates is a more complicated question. Like most valuable items, diamond prices increase with inflation.
The classic round cut diamond remains the most popular diamond shape of 2023. This classic shape is the most versatile and timeless shape, making it a great choice for any occasion.
There's a noticeable shift from yellow gold to white gold in 2023. While yellow gold is still a classic, white gold brings a trendy, modern appeal to any jewelry piece.
A real diamond has no limits on its shelf life. A lab grown diamond made in the Diamond Foundry may look the same as a real one, but has zero resale value. The brilliance of the relationship may be gone, but the stone will shine forever.
Which is best for investment: gold or diamonds? Gold is often regarded the better investment option over diamonds, as this precious metal is more easily traded and is often viewed as a currency with a stable, increasing value over the long term.
On average, the retail price for one carat diamonds can be anywhere between $2,000 to $16,000, and between $8,000 to $72,000 for two carat diamonds .
In the wholesale market, diamonds are priced per unit of weight, referred to as "per carat." Updated Thursday, June 1, 2023, diamond prices moved LOWER by an average of 2.7% in May 2023. The average price per carat of all diamonds in our database was $10,449.78, down from $10,745.23 a month ago.
In general, diamonds do not increase significantly in value over time. Outside of a small number of rare or colored diamonds, the vast majority of diamonds have decreased slightly in value over the last few years, making them a poor investment from a price appreciation perspective.
There's been an oversupply of rough diamonds in recent years, especially in smaller gems. Retailers are holding less inventory, forcing suppliers to keep more stock at a time that prices are falling. Banks have also been abandoning the sector, cutting off credit to an industry that has grown accustomed to cheap money.
Diamonds typically lose between 25 and 50 per cent of their actual worth upon resale due to market fluctuations, the markup on your ring, and the decline in diamond prices. A portion is also taken out for insurance.
Since a round diamond is thought to hold the most value when compared to the other shapes, it will almost always be given a higher price than any other shape with similar clarity, color, and carat weight.
Despite its ruggedness, diamond can lose its sparkle with oil or dust deposited on it. To maintain the sparkling of this indestructible gemstone is a tough job, but a possible one!