Will Lab-Created Diamonds Hold Their Value?
The popularity of lab-created diamonds is on the rise. If you compare a mined diamond side by side with a lab-created diamond, you probably wouldn't see the difference. The only way to tell the difference may be the price tag. You are going to pay a lot less for a lab-created diamond of the same size and quality as a natural diamond. But, will lab-created diamonds hold their values?
The Rise of Lab-Created Diamonds
The world of diamonds changed forever on July 24, 2018! The Federal Trade Commission now designates lab-grown diamonds as natural diamonds. They refer to the pure scientific and chemical composition of a diamond rather than its origin.
Lab-Created Diamonds Have Transformed The Diamond Jewelry Industry
Laboratory diamond technology has made breakthroughs in recent years, enabling companies to produce better quality diamonds faster and at a lower cost. This has resulted in increased competition between laboratory diamond companies and mined diamond companies. Today, producing a CVD lab diamond costs between $ 300 and $ 500 per carat, up from $ 4,000 per carat in 2008, according to a report commissioned by the Antwerp World Diamond Center (AWDC).
Laboratory-grown diamonds become more popular in the industry. Young diamond buyers are drawn to price, transparency, and environmental reasons. According to the AWDC report, this market segment is growing at 15-20% per year. This growth is expected to continue as more and more jewelers start selling lab diamonds and new labs are launched.
The Value Of Lab-Grown Diamonds
Customers looking for a non-mining alternative or a larger stone within their budget may prefer lab-grown diamonds, as they are generally less expensive than natural mining options. As with any gemstone, the resale value may vary over time. As lab-grown diamonds have been introduced to the market more recently, future prices are more uncertain than for natural diamonds.
Lab-produced diamonds are forever, but their value can be influenced by the brand of the supplier, the treatments used to grow and improve certain aspects of the stone. Lab-grown diamonds are more likely not to hold their value as manufacturing methods improve. However, it is not so much the stone itself that has a big impact, but rather the jewelry. Many big brands are playing with lab-grown diamonds and as we all know we buy their style and brand rather than the product they inherently come from.
Will The Lab-Grown Diamonds Last Forever?
As advertisers have repeatedly reminded us for decades, "a diamond is forever". It’s probably the most famous advertising slogan of all time. But lately, this slogan has been the subject of debate. As synthetic stones become more and more common, many people continue to believe that only diamonds mined at great cost will last forever. Fortunately, there is good news for supporters of synthetic diamonds. Stones produced in the lab are truly eternal, just like stones mined from the ground - and here's why.
Lab-Grown Diamonds Are As Tough As Natural Diamonds
One of the main reasons that natural diamonds are considered "forever" is that they are virtually impossible to damage, which is also the case for lab-grown diamonds. Lab-grown diamonds have the same chemical properties as diamonds mined from the ground, meaning they are just as hard as their natural counterparts. Like diamonds mined from the ground, lab-grown diamonds are rated 10 on the Mohs scale, which measures a material's resistance to scratching. Lab-grown diamonds can therefore undergo the same daily wear and tear as natural diamonds, which means they can be used for a traditional engagement ring.
They Are Chemically Identical To Natural Diamonds
Lab-grown diamonds are identical to mined diamonds in every way. The only difference is that they weren't taken out of the ground. This means that you could replace a natural diamond with a synthetic diamond in all the stories you heard about the resistance of natural diamonds to calamities such as fire, collapses, and loss, and you would get the same result. Lab-grown diamonds are truly eternal, and nothing can tarnish the shine or interfere with the brilliance of synthetic diamonds. That is the reason why it is impossible to tell the difference between a natural diamond and a synthetic diamond.
Lab-Grown Diamond: A Neat Heirloom To Inherit
The interest in making a diamond last practically forever is to be able to pass it on as an inheritance. But for many natural stones, the origins are obscure and impossible to trace. With lab-grown diamonds, on the other hand, you can safely pass on the details of the birth of your gemstones for generations to come. And what's even better is that the legacy you pass on will be eco-friendly. Lab-grown diamonds are made through processes free from conflict, human rights violations, child labor, and environmental disturbance, unlike many mined stones.
Are Lab-Grown Diamonds A Good Investment?
The speed of the process of creating lab-grown diamonds, compared to the billions of years it takes to form natural diamonds, can impact their value. That being said, lab-created diamonds tend to cost around 30% less than natural diamonds of the same quality and size, so from an initial purchase perspective, lab-grown diamonds are considered an excellent investment.
What Factors Determine The Value Of A Lab-Grown Diamond?
As with natural diamonds, the prices of lab-grown diamonds vary depending on several factors. Knowing these factors will help you determine the right ring for you.
The "Five C's" Of The Lad-Made Diamonds
The “Five C’s” of diamonds (carat, size, clarity, color, and certificate) largely determine the wholesale and retail price of your diamond. The jeweler will then take into account whether your diamond was lab-grown or mined and will give you a price that they believe is your stone.
Rarity
In the case of diamonds produced naturally from the earth, there is never any guarantee that a diamond will come out of the ground. In contrast, lab-produced diamonds are made to order, which means that the size, clarity, shape, and other characteristics can be changed by man, resulting in a stone that is rarer than the one that the earth can still produce.
Are Lab-Grown Diamonds "Cheaper" To Buy?
Some people think lab-produced diamonds are unsuitable for engagement rings because they are "cheap". Others say a diamond is a diamond, whether it comes from the ground or a lab. Still, others prefer lab-produced diamonds to diamonds mined for ethical and environmental reasons.
Not that long ago, most consumers viewed lab-made diamonds as "cheap". However, attitudes are changing rapidly. About ⅔ of 21-40 years old who buy an engagement ring are now ready to consider lab-grown diamonds. This is not very surprising given the price shock for natural diamonds. The average price of a lab-grown diamond is around 30-40% less than the price of a comparable natural diamond. Moreover, they look the same. With lower prices and a guaranteed ethical source, lab-produced diamonds are a practical, guilt-free choice.
Resale of the Laboratory Diamonds
With the growing popularity of lab-grown diamonds, one of the main questions people have is whether a lab-grown diamond can be resold in the future. Let's be clear: Buying an engagement ring or a diamond, regardless of its origin, to resell it later is not a good investment, but it is not a worthless purchase. Many traditional jewelers tell their customers that lab-created diamonds have absolutely no value, but that couldn't be further from the truth. Most diamonds mined from the ground have resale value, and most lab-created diamonds will also have similar resale value.
A Misconception of Value: Perpetuated By Many Jewelers
Typically, customers are told that their diamonds are not only a personal treasure but also a valuable treasure, tricking them into believing that their purchase can be resold for an amount equal to or greater than what they paid to them. What these jewelers don't tell customers is that as soon as a person walks out of the store, the resale value of the diamond drops to 30% of the purchase price, a loss of 70% from the original cost.
Understanding The Natural Diamond Resale Market
If you have purchased a naturally mined diamond, it is very unlikely that you will be able to resell it for a profit, unless it is an investment diamond (which is extremely rare). This is because jewelers buy their diamonds on a global market and can negotiate the best prices with diamond wholesalers. For you to be able to sell your diamond to a jeweler, it would have to be sold at a favorable price and well below the market rate - as there would be no incentive for a jeweler to buy your diamond above the market rate. It is therefore almost impossible to profit from the sale of your natural diamond. If you buy a natural diamond and try to resell it on the same day, you typically lose between 30% and 70% of the original purchase price.
The Supply And Resale-Market Of Lab-Grown Diamonds
Mined diamond jewelers claim that there is no resale market for lab-grown diamonds. This assertion is false. Just as mined diamonds have some resale value, lab-grown diamonds have a similar resale value, which is part of the original sale price. The resale market for lab-grown diamonds operates in the same way as the resale market for natural diamonds.
Although lab-grown diamonds are man-made, the supply remains limited. It's important to remember that a quality lab-grown diamond can take weeks or months to develop in the lab, so it's not true that lab-grown diamonds "flood" the market. Larger, better quality lab-grown diamonds are only available in limited quantities and are not as easy to find as we often think!
Today we are witnessing the emergence of a very similar system for the resale of laboratory diamonds, especially on the online market. We encourage consumers to keep in mind that just because your local jeweler isn't currently buying lab-grown diamonds doesn't mean they have no resale value. Rather, it is a relatively new product on the market and we need more time to see how it develops, just like we did with diamonds mined from the ground.
Buying a quality diamond engagement ring or piece of jewelry, whether from a lab or a mine, should be viewed as a discretionary and luxury purchase, not an investment. Historically, diamonds have not been a good place to "park" your money. You need to treat your lab diamond for what it is: a beautiful piece of wearable art and a representation of your love that will last forever.
