This content was first published on IGR – Italian Gemological Review no. 17 in 2023. The information provided here is therefore current as of the original publication date.
This was the nursery rhyme that little girls used to sing on the streets many years ago while playing innocent and creative games. The game was ring-around-the-rosy, and the rhyme implied that everything is a circle, everything is connected in play as in life. The same applies to the market and the economy. One product is always connected to another. So, synthetic diamonds, driven by speculative pressure, are cannibalizing natural ones in the market. This confuses consumers as they are pushed to buy a product that ultimately lacks the ability to retain its value.
Here are the initial effects; the prices of natural diamonds are temporarily declining (certainly not as dramatically as some newspapers claim). This is just the opening move (obviously) in the chess game between natural and synthetic diamonds, a game that will continue for some time and, in my opinion, will see neither winners nor losers. Two seemingly similar but fundamentally different products remain in the battle field, one with a proven history of value retention, the other destined to lose its value, as the history of all synthetic stones has demonstrated.
These are two different things. In continental Europe, where lab-grown diamonds have not spread as they have in the USA and the UK, young jewelers already see the opportunity to use them to develop affordable jewelry lines with price targets suitable for an online audience. It’s a smart approach that intelligently leverages the lower price point of synthetics and, in my opinion, could breathe new life into our old profession.
Meanwhile, natural diamonds are reorganizing in a process that will take some time, increasingly focusing on the addition of intangible values such as ethical compliance, traceability, and sustainability. Like any mined product, it will be regulated by the factors that determine its extraction and distribution.
There are also provocative actions in the game, such as that of an American jeweler, Steven Singer, who gives away a lab-grown diamond of equal size for every purchase of a natural diamond. An exaggeration? A desperate move? A provocation?
As for how this will end in America, where the price of speculation has been heaviest so far, we don’t know. In the meantime, for the benefit of our market, I have taken the liberty of writing some suggestions on how to properly present synthetic diamonds to the public, recognizing them as generic products rather than precious gemstones1.
Article by Sergio Sorrentino, published on IGR – Italian Gemological Review #17, Autumn 2023.
