Natural Diamonds Aren't High on the Priority List. Millennials would rather spend their money on experiences rather than material things. They would rather take a vacation in another part of the world than to buy expensive jewelry, for example.
Engagement Rings Are a Depreciating Asset
Like a car, a diamond is a depreciating asset since it loses a large portion of its value the second you buy it. Think about gold and silver. The market for them is very liquid and fungible since you can store coins, sell them at any time or even trade them later on.
Consumer demand for engagement rings set with natural diamonds fell 14.9% in May 2022 — but sales of rings set with lab-grown stones surged more than 73% that same period.
So, more often than not, they are incorporating these jewels in unique ways with their everyday outfits—be it traditional or contemporary. Given that for Gen Z, sustainability is an important factor when it comes to consumer purchases, natural diamonds have proven to be ideal symbols of conscious luxury.
After reaching sales of ~$80 billion in 2018 and staying about level in 2019, the global diamond jewelry market dropped to ~$64 billion in 2020, according to the latest “Global Diamond Report 2020-2021” by Bain & Company and Antwerp World Diamond Centre, the world's diamond-trading hub.
Diamonds typically lose between 25 and 50 per cent of their actual worth upon resale due to market fluctuations, the markup on your ring, and the decline in diamond prices. A portion is also taken out for insurance.
But they're not an investor's favorite currently, with the precious gems losing some significant value over the last few months. Diamond prices are down 18% from their all-time highs in February 2022, and are lower 6.5% year-to-date, according to one Global Rough Diamond Price Index.
Among the most revealing data from the research: 19% of 25-34-year-olds acquired at least one piece of diamond jewelry in the last year compared to 12% of older generations. Millennials spent $16 billion on diamond jewelry in 2017. Bridal jewelry accounted for 50% of these purchases.
Gold is often regarded the better investment option over diamonds, as this precious metal is more easily traded and is often viewed as a currency with a stable, increasing value over the long term. Diamonds are often more volatile as their value relies purely on their weight, cut, clarity, and colour.
A New Take on Pearls
Pearls look good on everyone (even men are rocking pearls), they're often budget-friendly, and Gen Z is bringing them back to runways and street style alike. Shop all pearl jewelry to find your favorites, or dive right into shopping dark pearls for that edgy vibe Gen Z loves so much.
Diamonds should represent memories and promises, but unfortunately many diamonds were mined in unsafe conditions or conflict zones. It can be very difficult to make sure your diamond is in fact ethical and conflict-free.
India was the world's largest diamond importing nation in 2021, having imported a nearly 24 percent share of all diamond imports worldwide that year, based on value. In second place at that time was the United States, with an 18.3 percent share of global diamond imports.
The fact is that diamond jewelry is still wildly popular. People still desire beautiful, natural diamond engagement rings and fashion jewelry. While it is true that diamond jewelry took a large hit in 2020 (as most industries did), it is expected to fully recover by 2023. Let's take a look at diamond engagement rings.
A diamond is a depreciating asset masquerading as an investment. There is a common misconception that jewelry and precious metals are assets that can store value, appreciate, and hedge against inflation. That's not wholly untrue. Diamonds, however, are not an investment.
Natural Diamonds Have Undeniable Value
Consumers attach a high value to natural diamonds because of their rarity, beauty, emotional symbolism, and significance.
Con: They can have imperfections
Although we are used to seeing perfectly shining diamonds, this is not always the case. Diamonds are just as prone to flaws and inclusions as other gemstones. The quality of a diamond is measured using the Four C's: cut, clarity, carat and colour.
Diamonds increase in value over time and don't offer short-term results. In fact, like other physical commodities, the price of diamonds fluctuates from time to time. The second mistake people often make is to pay too much. The first rule of investing is buying low and selling high.
Much like the purchase of a vehicle, a diamond's value can rapidly depreciate after the initial purchase. But if you buy a high-quality jewelry piece and take good care of it, you can expect to maintain a relatively consistent value that may even go up over time.
Zimnisky predicts the disruption in the supply of natural diamonds will be more significant in 2023, pushing up prices. Higher natural prices theoretically will benefit lab-grown diamonds, though that segment of the market is expected to face its own challenges this year.
– While the overall health of the economy influences the prices of diamonds, in general this gemstone has gained value over the years. Data shows the prices of diamonds over the past ten years have increased by approximately 32-33%, giving it an average of 4% every year.
20-Year Wedding Anniversary Stones
For 20-year anniversaries, the traditional gemstone is the regal-green emerald.
Overall, the answer is yes. A diamond's value appreciates over time. How much or how quickly it appreciates is a more complicated question. Like most valuable items, diamond prices increase with inflation.
What is the future of lab-grown diamonds? Due to their ethical and environmentally friendly characteristics, lab-grown diamonds are gaining popularity as a substitute for mined diamonds. With an anticipated growth rate of 22% between 2021 and 2026, the future of lab-grown diamonds is promising.
Beyond being a perfect size (big, but not too clunky on your finger), the 1-carat diamond ring is a popular choice because it allows the wearer to adorn a ring with side stones, like a 3-stone ring, leaving room for extra diamonds to accentuate the center stone without overcrowding or overwhelming it.
The value of an antique diamond will only grow over time. Specifically we are seeing Old Mine and Old European cut diamonds selling for the same per carat price as a Modern Cut with the same specs. In some cases, when an old cut diamond is exceptional, it will sell for more than a similar modern stone due to rarity.