Episode summary
How Diamond Prices Quietly Crashed 60% in Just Five Years
Summary
Diamond prices have fallen sharply over the past five years, and the host argues the collapse reflects a structural shift in the industry rather than a temporary downturn. He says a natural 1-carat diamond that sold for about $10,000 to $11,000 in 2022 now costs roughly $4,200, while lab-grown stones have dropped even more, with wholesale prices nearing production cost.
The host attributes the decline to lab-grown competition, China flooding the market with cheap supply, and changing consumer preferences among millennials and Gen Z. He says younger buyers increasingly favor value, larger stones, or travel over luxury diamonds, and that man-made stones are chemically identical to natural ones but far cheaper.
He also says the pain is showing up in corporate strategy: Anglo American has been trying to sell its De Beers stake, while lab-grown names such as Adamas One and Brilliant Earth look weak. By contrast, he says Signet Jewelers is still benefiting because the retailer has the pricing power to buy diamonds cheaply and pass them through with margins intact. He frames this as a classic industry power shift, similar to how retailers eventually pressured suppliers in other consumer categories.
Key takeaways
- The host says natural 1-carat diamond prices are down about 60% in five years, from $10,000-$11,000 in 2022 to roughly $4,200 today.
- He says lab-grown diamonds have fallen even harder, down 80% to 90%, with wholesale prices near production cost.
- The host argues China’s cheap lab-grown supply and younger consumers’ changing preferences are accelerating the collapse.
- He says Anglo American wants out of De Beers because nobody wants to own a stressed diamond asset.
- The host says Signet Jewelers is the beneficiary so far because the retailer can capture about a 20% margin.
- He expects consolidation among lab-grown producers before any one company gains enough power to pressure retailers.
Notable quotes
“Diamond prices have actually been crashing over the past five years. And I had heard that, and I had know it I knew it, but I just didn't know how bad it was”
“They've crashed about 60% in the past five years. In 2022, a natural one-carat diamond cost near 10 to 11,000 dollars”
“Man-made diamonds are actually chemically identical, I'm sure you know this, to natural stones, but they cost a fraction of the price”
“Lab-grown diamond prices are down 80 to 90%. Wow. This is why Anglo American has been trying, the big mining company has been trying to sell De Beers”
“The retailer is able to buy those diamonds cheap, whether they are actually mined or lab grown, and then add a price to it”
How the episode opens
Good morning. This is Don Giovanni with Behind the Markets. Happy Friday.
Today is Friday, August 14th. TGIF. Today I'd like to talk about something very old-fashioned, diamonds.
So, a buddy of mine has a son that wants to propose to his sweetheart. Wants to get her a ring. And he said to me, you know, I know you're interested in all sorts of markets.
Are you interested in diamonds? Do you follow that commodity? And I said, you know, hey, it's not a commodity.
But I said, you know, I actually haven't looked at diamonds for a couple of years. Let me look into that for a while. He asked me this story.
If he's going to take his son to get a diamond for the girl, what kind of leverage does he have when he negotiates with these people? And you know something, I haven't investigated this or looked into diamond prices in a while. Jewelry is of really no interest to me.
But I'll tell you, I learned something that I didn't know, and I thought it I'd share it with you. So, when your grandkids or kids are looking for diamonds, you can give them a piece of advice that might save them five or ten thousand dollars. Significant piece of money.
Anyway, so our generation, when we were growing up, you remember when you're buying a girl proposing to your woman, you got to get her diamond. They come up with all these marketing stuff. De Beers, the diamond company, would put all this propaganda in their magazines.
How much should you spend on the diamond? What percentage of your salary? And is there cut, clarity, and all that kind of stuff?
And you know, but I didn't know that diamond buying habits have changed a lot since we were kids.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- diamond price decline
- lab grown diamonds
- china supply of diamonds
- retail power shift
- signet jewelers
Companies and tickers mentioned
- SIG
- PG
- WMT
- Anglo American
- De Beers
- Signet Jewelers
- Procter & Gamble
- Walmart
- Brilliant Earth
- Adamus One
Watch the episode
Watch “How Diamond Prices Quietly Crashed 60% in Just Five Years” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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