Why Natural Diamonds Hold Their Value
Why Natural Diamonds Hold Their Value
Diamond Education › Why Natural Diamonds Hold Their Value
Why Natural Diamonds Hold Their Value — And Synthetic Diamonds Don't
A natural diamond and a synthetic lab-grown diamond may be chemically identical. But they are not commercially equivalent, not sentimentally equivalent, and not financially equivalent. One is a rare object formed over billions of years in finite supply. The other is a man-made commodity manufactured in a factory with no supply limit and a price trajectory pointing steadily toward zero.
This page sets out the facts — with data — about what natural diamonds are worth, what synthetic diamonds are worth, and why the difference between them will only grow over time.
Many Names. One Truth.
The diamond industry uses many different names for the same man-made product — most chosen for marketing appeal rather than accuracy. Whatever it is called, the financial reality is the same:
On this page we use these terms interchangeably. They all describe the same product: a man-made, synthetic copy of a natural diamond, produced in a factory. None of them are a natural diamond.
Natural Diamonds. No Synthetic. No Compromise.
Diamond Imports has sold natural certified diamonds since 1980. Every stone hand-selected. Every purchase a genuine investment in something rare.
How the Word “Synthetic” Was Quietly Removed — And Why It Matters to You
Before we get to the price data, there is a piece of industry history that every diamond buyer should understand. It explains how a product that was always called a synthetic diamond became known as a lab-grown diamond — and why that change happened.
The FTC — the Federal Trade Commission — is the United States government's consumer protection and trade regulation authority. In the jewellery industry, its Jewelry Guides are the most influential consumer protection standard in the world. Why does a US government body matter to a buyer in Australia? Because the FTC's guidelines set the standard that GIA — the Gemological Institute of America, the world's most respected diamond grading laboratory — aligns with. And because what GIA does, the entire international diamond trade follows. When the FTC changes its guidelines, the effects reach every diamond market on earth, including Australia.
In 2018, the FTC updated its Jewelry Guides for the first time in over 20 years. The lab-grown diamond industry — which had grown significantly and had strong commercial interests in how its products were described — actively lobbied for changes to the terminology guidelines. Two specific changes were made, both significantly benefiting man-made diamond producers:
- The word “natural” was removed from the FTC's definition of diamond. Previously, a diamond was defined as “a natural mineral consisting essentially of pure carbon.” The word “natural” was dropped — allowing man-made synthetic stones to be marketed simply as “diamonds” without any qualifier to distinguish them from stones formed in the earth over billions of years.
- The word “synthetic” was removed from the FTC's list of recommended descriptors. The lab-grown industry argued to the FTC that consumers confused “synthetic” with “simulated” — equating their product with cubic zirconia. The FTC accepted this argument and dropped “synthetic” from its suggested terminology, even though the word remained technically accurate and was legally still permissible to use.
GIA aligned with the new guidelines immediately. From July 2019, GIA stopped using the word “synthetic” on its reports for man-made diamonds. Because GIA reports are the global standard referenced by dealers, jewellers, insurers, and buyers in every country, this decision had worldwide consequences. The word that most accurately described what these stones were — synthetic, man-made, not naturally occurring — was retired from the most important documentation in the industry.
The marketing transformation was immediate. A product previously understood as a synthetic man-made copy of a natural diamond became simply a “lab-grown diamond” — a term that implies something organic, precious, and responsibly created. The factory, the industrial presses, the coal-powered electricity grids, the 24-hour production lines: none of that is suggested by the word “grown.”
The word “synthetic” was not retired because it was inaccurate. It was retired because it was commercially inconvenient. At Diamond Imports, we use all accurate terms interchangeably — synthetic, man-made, artificial, lab-grown — because we believe buyers deserve to understand exactly what they are purchasing.
The Foundation of Value: Rarity
Value in any market comes from scarcity. What is genuinely rare is genuinely valuable. What can be manufactured in unlimited quantities is, at best, a commodity — its price determined by the cost of production, trending downward as technology improves.
A natural diamond is one of the rarest objects on earth. Formed between one and three billion years ago at depths of 150 kilometres or more, under a precise and extraordinary combination of geological conditions that will never be repeated. No two natural diamonds are identical. Every stone is genuinely one of a kind.
A synthetic diamond — whether lab-grown, man-made, or artificial — was made in a factory. To a specification. And another one exactly like it will be made again next week. There is no scarcity, no geological story, and no rarity premium. There is only the cost of electricity and industrial equipment — and as both become cheaper, so does the stone.
The Collapse of Synthetic Diamond Prices — The Hard Numbers
- In 2015, synthetic lab-grown diamonds were approximately 30% cheaper than equivalent natural diamonds
- By 2020, they were 50–60% cheaper
- By 2025, artificial diamonds are 80–85% cheaper than natural equivalents — and still falling
- The average price of a one-carat lab-created diamond fell from $3,410 in January 2020 to just $892 in December 2024 — a collapse of 74% in four years
- Wholesale prices fell a further 37% year-on-year in Q3 2025, with three-carat rounds declining 43% in a single year
- A 1.5-carat man-made diamond that cost over $10,000 in 2016 was worth a fraction of that by 2025
- On the secondary market in 2025, synthetic diamonds retain only 30–40 cents in the dollar
People who bought lab-grown diamonds two or three years ago are discovering this the hard way. When they try to upgrade, trade in, or sell, they are being offered close to nothing — sometimes only the scrap gold value of the ring setting, with perhaps five cents in the dollar returned on the synthetic stone. The manufactured diamond they paid thousands for has essentially no secondary market value.
This is not a temporary dip. This is what always happens to manufactured commodities when production scales up. The price direction is one way only.
The Cubic Zirconia Precedent — This Has Happened Before
Synthetic lab-grown diamonds are not the first man-made diamond simulant to follow this trajectory. Cubic zirconia — introduced commercially in the early 1980s after Russian scientists developed the synthesis process in the 1970s — followed exactly the same pattern. When first introduced, it was positioned as a premium, high-quality diamond alternative. Today, a one-carat cubic zirconia stone retails for $10 to $30. Mass-produced stones cost pennies per carat.
Man-made lab-grown diamonds are following the identical path. As with any manufactured product, the price will continue to fall toward the marginal cost of production. There is no geological constraint to stop it.
The Pattern Is Clear
Cubic zirconia followed this path. Moissanite followed this path. Synthetic lab-grown man-made diamonds are following this path. The commodity always wins the race to the bottom. A natural diamond stands apart from that race entirely — because it cannot be manufactured.
Why Jewellers Are Pushing Synthetic Diamonds — And What They're Not Telling You
- Retail gross margins on synthetic lab-grown diamonds reached 84% on one-carat stones and 88% on three-carat stones in Q1 2025 — compared to 40–45% on natural diamonds
- A retailer selling a lab-created diamond at $2,000 may have paid $300 or less for the stone
- The percentage profit on a synthetic diamond is dramatically higher — making it commercially very attractive for the seller
- The environmental and ethical framing is, in large part, marketing designed to justify these margins
The buyer gets a synthetic commodity with no long-term value. The retailer gets an extraordinary profit margin. This is the commercial reality behind the enthusiastic promotion of lab-grown, man-made diamonds across the jewellery industry.
Ask the Question They Won't Answer Willingly
When a jeweller recommends a lab-grown or synthetic diamond, ask them: “What will this stone be worth in five years? What can I sell it for today on the secondary market?” The honest answer — 30 to 40 cents in the dollar at best, and falling — is rarely volunteered. At Diamond Imports, we will tell you exactly what any stone is worth, whether that answer is convenient or not.
GIA Changed How It Grades Man-Made Diamonds
In late 2025, GIA stopped using its traditional colour and clarity grading scale for synthetic lab-grown diamonds. Since 2022, 95% of all man-made diamonds submitted to GIA received D, E, or F colour grades and 98% received VS1 or better clarity. GIA replaced full grading reports for synthetic stones with just two categories: Premium and Standard — an implicit acknowledgement that the two products are not comparable in any meaningful way.
The Sentimental Reality
A natural diamond is one of the oldest objects you will ever hold. It formed before the dinosaurs existed. A 2024 study found that while 78% of consumers acknowledged the visual equivalence of lab-grown and natural diamonds, only 23% attributed any “emotional value” to synthetic stones — compared to 89% for natural diamonds.
Not everyone can own a natural diamond. That is a geological fact. And it will remain true long after the price of synthetic, man-made diamonds has reached its inevitable floor.
Natural Diamond Prices — The Honest Picture
Natural diamond prices have softened from their 2022 peak — worth acknowledging honestly. But this is demand-side pressure, not a change in geological scarcity. The supply of new natural diamonds is actually decreasing as major mines deplete. That constraint is permanent.
A natural diamond purchased 10 or 20 years ago retains real value — it can be insured, traded, upgraded, and used as collateral. A synthetic, man-made diamond purchased two years ago is worth a fraction of its purchase price. The trajectory is downward with no floor in sight.
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