This naturally raises the question: Will synthetic diamonds, meaning lab-grown diamonds, replace natural colored diamonds as exclusive high-end luxury products? A look at market trends in other industries allows us to confidently answer this question with “no.”

Despite the quartz watch crisis in the 1970s and 1980s (technically much more precise and significantly cheaper than mechanical watches, often in similarly high-quality cases), many mechanical luxury watches still have waiting lists today, even with prices ranging from several thousand to several hundred thousand euros.

Another example is vinyl records. Although digital media such as CD, WAV, FLAC, or MP3 are technically superior in terms of dynamics, frequency, and stereo information, vinyl records are experiencing more than just a strong revival among music lovers. Not only are vinyl records more expensive than digital media, but the associated equipment, such as record players, can also cost well over 100,000 euros.

One could dismiss this as traditionalism from nostalgic people, but we believe that emotions take center stage here, emotions that only certain goods can convey. While far more quartz watches and digital music media are sold, for a certain individual buyer segment, authenticity and uniqueness matter more than absolute synthetic perfection. This market exists for this specific group of buyers, who, although a small percentage of consumers, are fascinated by natural uniqueness. This uniqueness, combined with the natural beauty of Fancy Color Diamonds, drives prices upward and makes these “stones” desirable collector’s items and investment objects, with prices sometimes soaring to dizzying heights.

With synthetic Fancy Diamonds, it will be possible to make these beautiful gemstones accessible to a much larger customer base in the future. This will likely increase the desirability of genuine, natural Fancy Diamonds rather than replace them.

The first synthetic diamond of gem quality was lab-grown in 1970. Around this time, researchers also began developing methods to treat diamonds with lower-quality colors to achieve higher-quality colors and intensities. These procedures have existed and been applied for over 40 years, but such treated diamonds have only a fraction of the value of a diamond with the same natural color and must therefore be explicitly labeled as such. These diamonds are bought by customers who are enthusiasts of a particular color but cannot afford a naturally colored diamond in that shade. However, they have never displaced their natural counterparts. Although it was already possible at that time to artificially produce all colors, the market only accepted “genuine” Fancy Diamonds as exclusive products, and the market now reacts similarly to fully synthetic Fancy Diamonds.

For white, or rather colorless diamonds, this could be somewhat different, as they are by no means as rare in nature (ratio 10,000 to 1) as Fancy Diamonds. Even though some dealers are now increasingly recommending lab-grown diamonds to customers due to higher margins, the current trend of lab-grown diamonds may eventually lean more toward fashion jewelry. As the prices of lab-grown diamonds continue to fall – over the past two years alone by more than 90 percent* – due to new, cheaper technologies*, they are almost unsellable on the secondary market. For this reason, synthetic diamonds cannot be considered an investment. Diamonds have been and continue to be used across generations, not only as jewelry or status symbols but also as an investment.

The fact that they came to the Earth’s surface millions of years ago only through volcanic eruptions makes their inclusions witnesses to the history of our planet. Such a diamond, hundreds of millions of years old and enduring the hardships of nature, is in a sense created for eternity and conveys a deeper emotional connection for many people than a lab-grown or treated diamond.

By the mid-2000s, 40 times more synthetic diamonds were being produced than natural diamonds were being mined, as the latter could by no means meet industrial demand. The future of synthetic diamonds will thus predominantly lie in their use as mainstream fashion jewelry and in the industry.

*Proactivinvestment – natural diamond recovery 2024