The Value of Diamonds: Natural vs. Lab-Grown
Diamonds have long been associated with value, status, and rarity. While many people link these gems with love, anniversaries, and engagements, others wear them as stylish symbols of their success. Once exclusively mined from the Earth, diamonds can now also be grown in dedicated laboratory environments. But how well do lab-grown diamonds hold their value over time? Here’s what you should know.
What Determines Diamond Value?
Over the centuries, diamonds have been prominent symbols of prestige and wealth. However, the actual monetary value of diamonds has fluctuated due to various market factors, including supply and demand.
Similar to gold, silver, and platinum, the value of a diamond rises and falls based on its demand as a commodity. For example, the discovery of new diamond mines can cause prices to drop due to an increase in supply. Conversely, when the demand for diamonds rises, their value increases.
Diamonds are considered a wise investment because they generally retain a competitive market value that remains consistent or increases over time. This is mainly because there is a limited amount of natural diamonds on Earth. If you buy a natural diamond at a fair price and take care of it, you can expect a gradual increase in its overall value.
Are Lab-Grown Diamonds a Good Investment?
Scarcity is a significant factor influencing a product’s value. Natural diamonds, being relatively rare, have a higher value than lab-grown diamonds, which are not in short supply. This means their resale value is relatively low compared to gemstones mined from the Earth.
However, lab-grown diamonds offer several compelling benefits that appeal to modern buyers. In addition to being identical to natural diamonds, these man-made gems are created with responsibly sourced materials in an environmentally friendly way.
Natural diamonds are sometimes linked with human rights issues and ecological concerns. In contrast, lab-grown diamonds are made in controlled environments, eliminating these ethical issues. Lab diamonds also typically cost about 30% less than natural diamonds of comparable quality and size. For many, these factors offset concerns about their limited resale value.
Are Lab-Grown Diamonds Valuable?
Natural diamonds take billions of years to form under intense pressure and high heat miles within the Earth. Lab diamonds, on the other hand, are made relatively quickly using specialized technology. Despite these differences, both types of gemstones are identical at the molecular level. The only difference is that lab-grown diamonds include microscopic inscriptions.
While lab-grown diamonds are the same as mined diamonds in every way, their unlimited supply affects their value. This is part of the reason lab-created diamonds have seen a decline in resale value in recent years.
As with any valuable item, natural diamonds will increase in value in accordance with inflation. A diamond purchased in 1980 is worth much more today. Whether this increase is due to the rarity of the stone or inflation itself depends on factors such as the gem’s uniqueness, shape, quality, and color.
Unlike natural diamonds, lab diamonds generally won’t gain value over time. Their value has not kept up with inflation, mostly due to the increased availability of lab-grown gemstones. To put it simply: a lab-grown diamond isn’t likely to bring much return on investment. However, natural diamonds can increase in value based on relative scarcity and fluctuating market demand. Still, the appeal of a beautiful, affordable lab diamond often outweighs the value shift for many.
The Price of Lab-Grown Diamonds
In recent years, lab-grown diamonds have become more popular, leading to a drop in their prices. You might wonder, doesn’t increased demand drive prices higher? Normally, yes. But with lab-grown diamonds, suppliers have increased production in response to higher demand, causing prices to fall. This allows consumers to attain beautiful diamond jewelry pieces at lower prices.
It’s important to remember that a diamond is only part of what makes jewelry valuable; the precious metal content and uniqueness of the design also contribute to overall pricing.
Are Lab-Created Diamonds Worth Anything When Resold?
While lab-grown diamonds have seen a decline in resale value, this doesn’t reflect on the quality of the gemstones. Lab diamonds are less costly than natural diamonds not because they are lower quality but because they are more abundant, and the supply chain is shorter.
Their resale value may not be as high as natural diamonds, but the primary purpose of buying a stunning diamond piece isn’t to resell it later. Ultimately, you are purchasing an elegant reflection of your style or a meaningful token of love that can become a cherished heirloom.
The Real Value of Your Diamond
What makes a natural or lab diamond an investment-grade gemstone? It’s primarily the color, cut, clarity, and carat weight. The higher a diamond ranks in these categories, the greater its monetary value now and in the future. Like the purchase of a vehicle, a diamond’s value can depreciate after the initial purchase. However, buying a high-quality jewelry piece and taking good care of it can help maintain its value.
Ultimately, the real value of a diamond is how it represents your personal story. Whether it’s an engagement ring or another jewelry piece, the emotional significance often outweighs monetary considerations.