Natural diamonds: answers from a diamond dealer

Yes, it's a myth. I know people at De Beers, and other large mining companies. They swear there are no Indiana Jones style warehouses full of diamonds. De Beers acknowledges this USED TO be a thing, but hasn't been for 30+ years.

Jewelry quality diamonds over 1ct are genuinely very rare. When people spout the "diamonds aren't rare" trope, they're using numbers that refer to ALL diamonds mined - including tiny ones, and very low quality stones suitable for industrial use (saw blades, drill bits, etc.) but not jewelry. Of course, those are much more common.

I think we're at or near the floor for natural diamonds. Supply is dwindling in a very meaningful way (some of the largest mines in the world are scheduled to close soon, as they are running out of diamonds to find), and demand seems to be rebounding globally as the large cutters sell through their stock (which was excessive last year, but is now coming down). Of course, I don't know what I don't know, but from what I see, I expect a modest increase in natural prices next year.

As for LG, prices keep falling, and every time I think, "they can't go lower than this, can they?" I'm proven wrong.

Unfortunately, I don't see natural prices going down in the long term. Our natural supply is quickly dwindling. Most people don't know this, but peak global production of natural diamonds was back in 2006, and we've been getting less and less out of the earth ever since. Mother nature is simply running out!

And for the very wealthy, diamonds are just another way to store money. Keep it in dollars, in real estate, in art, in diamonds. All the same to them. And in diamonds, they can enjoy it while they store the value!

It's because supply is decreasing globally. Peak diamond mining production was in 2006, and it's decreased every year since. Many of the world's largest mines are scheduled to close soon (Argyle, in Australia, closed permanently last year). The world is simply running out of diamonds. At the same time, for the first time, China and India have a true middle class, and they have an appetite for diamonds.

So, supply is down and demand is up. Econ 101 my friend.

But don't give up hope! You can still find an awesome stone for the right price if you work with a trusted expert. Those of us who swim in these waters daily know how to avoid the riptides.

LGs are a consumer product, with no limit on supply. Natural stones are supply limited. There are only so many of them in the ground, and peak global production was in 2006. It's been down every year since. We're literally running out. In fact, one of the largest mines in the world (Argyle, in Australia) closed last year - they had gotten all they could. Several others are scheduled to close soon.

This is why most experts expect the markets to bifurcate, and LGs to track naturals in price less and less as time goes on.

It's a natural diamond with very poor clarity (I2 or I3), which has been treated artificially to improve that clarity (typically by injecting silicone into the imperfections in the stone). So it's both natural and enhanced. Does that make sense?

How much are they charging for this? A treated stone should be MUCH cheaper than an untreated one. Also, bear in mind that if you ever want to sell or trade this, the secondary market for treated stones is a fraction the size of the natural stone market. So you'll have a tough time getting your money back out if you ever want to.