Investment-Grade Diamond Prices Fall to Their Lowest Recorded Level as De Beers Bets on Natural Stones

The index that tracks investment-quality diamond prices fell in August to the lowest level it has recorded, according to the Israeli business daily Globes, which reported that the average price of a one-carat natural diamond has fallen to roughly $3,900 from more than $8,000 in 2021. Laboratory-grown stones, which are chemically identical and now cost a fraction of mined equivalents, are the main cause.

De Beers is responding with a marketing argument rather than a supply one. Its chief executive told the Financial Times that a cultural shift back toward natural products can restore the category, positioning mined diamonds against synthetics on provenance and rarity rather than on appearance. The company is effectively asking buyers to pay for provenance and brand narrative that a machine cannot replicate, because the physical distinction no longer supports the price.

The contrast with gold is instructive. Gold cannot be manufactured at scale, and its price sits about 23 percent below the level it reached in January, a decline driven by a monetary shock rather than a technological one. Diamonds were marketed for decades as a store of value on the strength of controlled supply. Once laboratory production removed the supply constraint, the resale market repriced the underlying asset toward its production cost.

For producing countries, the consequence is fiscal. Botswana, Namibia and Angola depend on diamond royalties that were set when the scarcity premium held.