Diamond prices hit a new low in the past five years. Are diamonds still worth buying?

Recently, the plunge in diamond prices has once again triggered heated discussions. According to CCTV Finance, the price of certified diamonds has fallen by 35% to 40% in the past year. As soon as the news came out, it once again triggered a discussion about diamonds no longer retaining their value. Some netizens said, "My intestines are full of regrets, so I might as well buy gold." Some netizens also shared that it doesn’t matter whether the value is maintained or not, as they are happy just looking at the shiny ones. Are diamonds still worth buying?  Or a good choice to buy Lab Grown Diamonds ?


Diamond prices hit lowest level in nearly 5 years

According to CCTV Finance’s interview with a diamond wholesaler in the “European Diamond Capital” of Antwerp, Belgium, the price of certified diamonds has dropped by 35% to 40% in the past year. Among them, diamonds from 50 cents to 3 carats were hardest hit, with sales falling by 30% to 35% during the same period.

According to the Diamond Price Index of the International Diamond Exchange, diamond prices reached a historical peak of 158 in March 2022, and then fell all the way to the current level of around 110, a new low in the past five years, a decrease of approximately 30%.

In an interview with China News Service, Wan Zhe, a professor at Beijing Normal University and former chief economist of China National Gold Group, believed that due to the epidemic and the international supply chain crisis in the past two years, global inflation was high and diamond prices were at a high level. The drop in diamond prices this year is a fall after being at a high level in the past two years.

In addition, the global economic outlook has become more cautious, and consumption downgrade is one of the important reasons. Wan Zhe said that the Federal Reserve began to raise interest rates in March 2022, and thereafter triggered a "wave of interest rate hikes" around the world. The overall financial conditions have changed from extremely loose to extremely tight. The world has become cautious about the economic outlook, and the public's consumption of non-necessities has begun to shrink. Diamonds are one of them.

Fleishteg, director of the Belgian Federation of Diamond Exchanges, also said that energy prices in Europe have risen and electricity is more expensive for people, so "if you have too many living expenses, you will definitely say you will buy diamonds in the future."

Weak demand for natural diamonds can be felt from the performance of international diamond giant De Beers. According to reports, De Beers sold US$370 million in natural diamonds in its seventh sales cycle this year (August 14-29), a year-on-year decrease of 42% and a month-on-month decrease of 10%. This is also the company’s fourth consecutive sales period this year. Monthly sales fell.

And Lab grown diamonds are becoming more and more Popular. 

Netizen: It’s a shame to use it but it’s a pity to throw it away

After diamond prices plummeted, some netizens said they had no regrets:

"I know it won't keep its value, but I like it very much. I'm happy to see it sparkling." "Don't sell it, it's not worth the money, but it looks good when you wear it." "I still don't regret buying the diamond ring. The appearance rate is much higher than that of Sanjin. I have never worn the three gold rings once." "If it's not valuable, it's not valuable. It's fine when you buy it. Isn't it good to wear it to please yourself?" "I've gained twenty pounds and can no longer wear it, but I still like diamond rings. .”

Some netizens shared: I recently bought a diamond ring and wear it every day. In every photo I take, the diamond ring is very conspicuous and sparkles on my hand. It makes me feel better every time I see it. It does not depend on whether it will retain its value.

Some netizens also said that after the price plummeted, "the more they looked at it, the less they liked it":

"I regret it so much. I bought a diamond ring for 20,000 yuan. Now the more I look at it, the more I feel it is too small. The more I look at it, the less I like it. It is worthless after selling it. I might as well just choose a gold ring at that time. I was young and disliked gold rings. Now I think that gold can still be exchanged, but diamond rings can only gather dust and be put in drawers." "I was wronged. I spent 40,000 yuan to buy a diamond ring. Now it hurts." "I spent more than 20,000 yuan to buy it, and it lasted four years. I haven't worn it often, and now my intestines are full of regret." "I spent more than 10,000 yuan to bring it home, and after I got married, it gathered dust in a cupboard and ate dust. Now the recycling price is only 2,000 yuan. It's a pity to throw it away if I don't use it. "

Consumers who have already bought a diamond ring may be "regretful" or "still happy". Among young people who have not yet bought it, some said they would still buy it, while others turned to gold.

On a certain platform, after a blogger posted the latest diamond prices, many netizens still commented, "If you want to buy, chat privately."

But some young people who used to pursue fashion also set their sights on gold. More and more young people are sharing their experiences of saving gold beans, buying gold bars, and matching gold bracelets on social media.

Wan Zhe analyzed that young people buy gold with the mentality of balancing consumption and investment. Traditionally, the impression of gold jewelry is old-fashioned. Now more and more businesses are beginning to focus on developing the young market segment. The design concepts and reputation of some domestic brands are rising, attracting consumption from this group of people who like jewelry.

Will “carat freedom” be achieved?

While diamond prices have plummeted, the development of lab-grown diamonds has accelerated.

According to CCTV, Ankur Daggar, CEO of the American jewelry company Angara, said that three years ago, the price of artificial diamonds was about 20% to 30% lower than that of natural diamonds. Now, with the reduction of manufacturing costs and the improvement of production efficiency, the price difference between artificial diamonds and natural diamonds has widened to about 75% to 90%.

According to data compiled by Tenoris, a global jewelry industry analysis organization, the market share of man-made diamonds has continued to increase since 2021. In July this year, the market share reached 49.9%, which is very close to the 50% critical point.

The upstream links of cultivated diamonds mainly include raw material supply, equipment supply and synthesis, etc. The production capacity is mainly distributed in Henan, China. Recently, Henan has also accelerated the development of cultivation industries.

On August 25, at the 2023 Second China Jewelry Innovation Conference, the World Lab grown Diamond Promotion and Trading Center officially signed a contract and landed in Zhengzhou High-tech Zone. Data from the Superhard Materials Branch of the China Machine Tool and Tool Industry Association show that my country's artificial diamond production accounts for 95% of the world's total production, while Henan's Lab Grown diamond production accounts for about 80% of the country's total production.

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