Value of diamonds has plummeted in past 2 years, warns 77 Diamonds

Both natural and lab grown diamonds have seen a significant reduction in value, according to online jeweller 77 Diamonds.

Over the last two years, the value of a 1ct natural diamond, based on the cost price of round diamonds, has fallen by 34%, whilst a 2ct stone is now worth 49% less.

Furthermore, the value of a 1ct lab grown diamond has plummeted by 73% in the last two years alone, whilst a 2ct stone is now worth 77% less.

A number of global influences have been blamed for this reduction in value, most notably a reduction in global demand for luxury products.

This dwindling demand has been particularly notable across China, the second largest global market for diamond sales, with economic uncertainty due to a declining real estate market and a clamp down on corruption causing sales to fall.

Alongside this, the ban on Russian diamonds being sold in the G7 has also impacted demand.

Tobias Kormind, co-founder of 77 Diamonds, said: “The diamond market has a history of fluctuating values and this cycle is always driven by the balance between supply and demand. At present, we’re seeing a drop in global demand from luxury buyers, which has been driven by America and Europe, as well as a decline in Chinese consumption both domestically and internationally.

“In fact, De Beers has cut production in its mines by 20%, with the firm also going up for sale, which really gives an indication of the difficulties within the industry given they are the biggest name within the space.”

He added: “The emerging popularity of lab grown diamonds has also been an influential factor in the declining price of natural diamonds. However, lab grown diamonds have seen an even larger decline in value and this is simply due to massive investment in capacity causing a huge oversupply as well as advancement in technology to grow the diamonds more efficiently.

“The natural diamond market is far more complex but it’s likely we’ve now seen the bottom of this downward cycle. With Donald Trump’s America first policy coming online with the tax cuts, deregulation and further investment, the largest diamond market in the world is likely to push prices up as we move into a more bullish phase for the American economy.”