Natural Diamond Prices Hit Record Lows as Lab-Grown Stones Take Hold

The Diamond Standard Index, which tracks prices of so-called investment-grade diamonds, hit 2,490 in early August, its lowest level ever, and hovered just north of 2,500 this week. Natural diamonds have lost more than half of their value over the past five years.

Two forces are driving the decline. A large overhang of excess inventory built up in 2023 and 2024 after excess production during the Covid pandemic, and sales have since fallen because of competition from lab-grown stones. "There's a lot of doom and gloom about natural diamonds," Diamond Standard CEO Cormac Kinney told CNBC. "There was a very large overhang of excess inventory back in 2023 and 2024 after excess production during Covid, and then [there's been] the falling sales due to the lab-grown [diamonds]."

Lab-grown diamonds have the same chemical and physical properties as natural diamonds but are produced by applying heat and pressure to carbon seeds or from carbon-containing gas in a vacuum chamber. The main difference is price. A nearly colorless lab diamond with very, very slightly included clarity and an excellent cut can sell for $450 on Brilliant Earth's online marketplace, while a natural stone with the same specifications falls in the $2,800 to $3,200 range. Lab-grown stones are priced below natural diamonds at every carat weight and can cost as much as 90% less, a gap that partly reflects the fuel and labor required for mining.

The price gap has pushed budget-conscious buyers toward man-made stones. Engagement rings with lab-grown center stones accounted for 61% of all engagement ring sales in 2025, up 239% since 2020, according to The Knot 2026 Real Weddings Study. Fortune Business Insights projects the lab-grown diamond market will grow to nearly $92 billion by 2034, from $29.46 billion in 2025.

"They're able to take the extra money that they didn't spend on the 5-carat natural and put it towards their wedding and maybe buy a house or whatever they want to do," Cory Schifter, owner of New York and New Jersey-based Casale Jewelers, told CNBC, describing how lab-grown stones let customers spend where they choose rather than building settings to make a smaller stone appear larger.

The natural diamond industry has begun responding. De Beers Group, an Anglo American subsidiary focused on mining, sorting and grading diamonds, said in July it would halt production at its flagship Venetia mine in South Africa for more than two years, a move that limits supply and could support prices. At least two diamond mines have announced permanent shutdowns in 2026. "There's also been a significant disruption in supply because two of the mines have filed for bankruptcy, and De Beers itself has announced the closure of one of its largest mines," Kinney said. "So what we're seeing now in the wholesale market is price appreciation for certain qualities [of diamonds], and it's, I think, the beginning of a recovery."

Whether those cuts can halt the decline in the natural diamond market is not yet clear. On the investment side, Raymond James analyst Rick Patel has an outperform rating on Signet Jewelers, which he says offers exposure to the lab-grown boom. "Lab-grown diamonds have actually done well for Signet, particularly on the fashion side," Patel said. "The products with the lab diamond generate about three times the [average unit retail] of other fashion products that do not have a lab diamond." Signet did not respond to questions about its margins on lab-grown and natural diamonds.