Natural Diamond Prices Plunge 51% in Five Years Amid Lab-Grown Surge
Natural diamond prices have plummeted by over 50% in five years, hitting historic lows due to post-pandemic oversupply and competition from lab-grown diamonds.
Natural diamonds, long considered a symbol of rarity, prestige, and value retention, have lost a significant portion of their luster in recent years. Natural diamond prices have plummeted by more than half within five years, while a key industry price index has hit an all-time low.
According to data from the Rapaport Group, which operates a diamond trading platform, the average price of a one-carat natural diamond currently stands at about $3,898. This represents a 51% drop compared to an average price of $8,007 in 2021.
The Collapse of the Diamond Standard Index
The Diamond Standard Index, which tracks diamond prices defined as "investment grade," dropped in early August to 2,490 points — the lowest level since the index was launched. This week, the index has been trading slightly above 2,500 points.
One of the main factors driving down prices is oversupply. In the years following the COVID-19 pandemic, a large inventory of mined diamonds accumulated following a period of overproduction. Attempts to offload these inventories are putting additional pressure on prices.
Lab-Grown Diamonds Weigh on Demand
At the same time, a deeper development is taking place: lab-grown diamonds are becoming increasingly widespread. Unlike a natural diamond, which is formed through a geological process lasting billions of years, a lab diamond can be produced in a much shorter time — and at a significantly lower price.
"There is a lot of pessimism surrounding natural diamonds," Cormac Kinney, CEO of Diamond Standard, told CNBC. According to him, 2023 and 2024 saw a "very large inventory overhang" in the market, created by overproduction during the pandemic, followed by a sales hit driven by the rise of lab-grown diamonds.
The crisis is also evident at one of the industry's largest players, De Beers. In the first half of 2026, the average price the company received for rough diamonds dropped by 32% to $105 per carat, compared to $155 in the same period last year. De Beers notes that lab-grown diamonds continue to weigh on demand for natural ones, particularly in categories of smaller and lower-quality stones.
Thus, within just five years, the premium that the natural diamond market successfully maintained for decades has eroded significantly. However, this time it is not merely a cyclical market fluctuation: new technology enables the production of diamonds in labs at a fraction of the cost, casting a shadow over one of the products built on a long-standing narrative of rarity and intrinsic value.
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