Consumer perspectives have shifted significantly over the 40years that I have been in the diamond business. When I started out in the early 1980s, buying a diamond was a romantic, emotional experience. Its mystique was linked to its rarity, its perceived uniqueness, and the joy of discovery during the shopping process.
This traditional view of diamonds has shifted with the rise of certification, transparency, and the accessibility offered by the internet. The diamond market has become more commoditized, where consumers can compare prices, examine flaws, and get a better understanding of what they are buying, often without stepping into a store. The process of acquiring a diamond, once filled with romance, has become increasingly transactional.
Recent reports have raised doubts over diamonds as viable investments, often comparing them to gold or other financial assets. Unlike other luxury items, such as designer bags, diamonds’ value comes from a combination of art, history, and sentiment—an acquisition that can be passed down through generations. I own a diamond from my grandfather, and its value to me is immeasurable; no price tag could ever capture its significance.
Unlike gold, with which diamonds are erroneously compared to, or art, diamonds occupy a middle ground. While not as liquid as gold or as illiquid as art, natural diamonds retain intrinsic value over time.
For example, I have collected numerous works of art, but only a handful have appreciated significantly over two decades. This unpredictability does not make the art any less valuable to me, but it highlights the varied nature of investments. I cherish the stories behind my art collection—how I discovered each artist and acquired each piece alongside my wife. That does not mean diamonds do not serve as a form of security in times of crisis. History has shown that in turbulent moments, diamonds have been portable assets that can be used to re-establish stability.
The value of diamonds can fluctuate, but it doesn’t depreciate—nor does it get damaged—as quickly as other commodities. According to a Bain & Co report, on an average, prices have increased by 3% year-on-year over the last 35 years.
The rarity of natural diamonds will only grow, as their supply is limited. No significant new diamond deposits have been discovered in the past two decades and the current mines are gradually depleting. The natural pink diamonds that the Argyle mine in Australia produced over 30 years, for instance, are now coveted collectors' items, providing extraordinary returns as the Argyle mine is now closed.
The introduction of lab-grown diamonds has added a layer of variety to the industry. These diamonds, created in a controlled environment, are more affordable and abundant compared to natural diamonds. While they share the same physical properties, they lack the rarity, preciousness, and emotional weight of natural diamonds. They follow Moore's Law—as technology improves, their production becomes cheaper, their quality better, and their size larger—further reinforcing their status as a manufactured commodity, rather than a unique and naturally-available gem.
Their rise reflects the broader trend of commoditization in the diamond industry. Some consumers may be drawn to the lower price point of lab-grown diamonds. For example, it may work for the 25-27 year-old on his—dare I say—first marriage proposal. But for his 10th wedding anniversary, his gift would be the real thing, a natural diamond.
After an unprecedented boom in 2021 and 2022, the market has contracted, with the value of global retail-studded diamond jewellery declining from $90 billion to approximately $75 billion in 2024. This was due in part to slowing luxury demand in China and some cannibalisation from lab-grown diamonds in the U.S. While the diamond market may go through its cycles, the emotional and lasting value of real diamonds will continue to endure.
I see this as an industry that’s in the business of bringing joy to consumers, through birthdays, engagements, anniversaries and gifting. Life is an assimilation of memories, time spent with loved ones and natural diamonds are attached to landmarks in life. It’s the only commodity that’s a brand in itself.
For consumers, my advice remains simple: stay invested in love, invest in natural diamonds, because natural diamonds are forever.
Written by Russell Mehta, Managing Director at Rosy Blue India Pvt. Ltd.
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