The Diamond Market in 2026: What's Actually Happening

The diamond market in 2026 is not the market it was five years ago. In May 2021, Pandora, the world's largest jewellery company by unit volume, announced that it was switching to exclusively lab-grown diamonds in its new products. The announcement was framed as an ethical and environmental decision. It was also a commercial acknowledgement that the technology to produce gem-quality diamonds in a laboratory had reached a price point at which lab-grown stones were no longer a luxury alternative to mined diamonds but a direct commercial substitute.

The diamond market has not recovered its pre-2022 pricing since. Natural diamond wholesale prices are down approximately 30 to 40 per cent from their 2021 peak. Lab-grown diamond wholesale prices are down approximately 75 per cent from their 2022 levels and continue to fall as production capacity expands. The engagement ring market, which had been the primary driver of diamond demand for the previous four decades, has shifted significantly toward lab-grown stones at every price point below approximately £5,000. The commercial-grade natural diamond, the bread-and-butter of every high-street jeweller's engagement ring case, is in its most difficult period since the 1980s recession.

What I find worth writing about, clearly, on the diamond market in 2026, is not that it is in crisis (the trade press has covered that adequately), but that the market transition creates specific, practical information asymmetries that are costly if you're on the wrong side of them. People are still buying diamonds for engagement rings. People are still holding diamonds they bought in 2019 and are wondering what they're worth now. People are still being told by some retailers that natural diamonds are a "natural investment" (they were never really that, but the claim is harder to make at current price levels than it was in 2019). The information gap between what is happening in the diamond market and what the average buyer knows about it is large, and costly, and this is the piece intended to close it.

What drove diamond prices to their 2021 peak

The structural driver of diamond prices through most of the twentieth century was supply management by De Beers, the South African mining conglomerate that at its peak controlled approximately 85 per cent of the world's rough diamond supply and maintained prices by managing how much rough it released into the market. The De Beers cartel model, while it lasted, produced remarkably stable and gradually appreciating diamond prices over six decades from roughly the 1930s to the early 2000s.

The cartel model weakened substantially through the 2000s and 2010s as new producers (Russia's Alrosa, Canada's mines, Australia's Argyle) operated outside De Beers's direct control, and as De Beers's own market share declined from over 80 per cent to approximately 30 to 35 per cent by 2020. The stability of diamond prices in the 2010s was driven more by genuine demand growth, particularly from China and India, than by supply management.

The 2020 to 2021 period produced the most significant short-term demand spike the natural diamond market had seen in years. The combination of accumulated savings from the Covid-19 lockdowns, a shift in consumer spending from travel and experiences toward goods, and an acceleration in engagement rates in the English-speaking world produced a sharp uplift in fine jewellery demand in 2020 and 2021. Natural diamond wholesale prices at their 2021 peak were at levels not previously seen.

The peak was built partly on a genuine demand uplift and partly on temporary conditions that dissipated after 2021. The subsequent price correction would have been significant even without the lab-grown disruption. With it, the correction has been sharper and more sustained.

What lab-grown technology changed

Lab-grown diamonds are produced by two main processes: high-pressure high-temperature (HPHT) synthesis, which replicates the geological conditions under which natural diamonds form, and chemical vapour deposition (CVD), which builds diamond crystal layer by layer from a carbon-rich gas. Both processes produce material that is chemically and physically identical to mined diamond — the same crystal structure, the same optical properties, the same hardness. The only technically reliable way to distinguish lab-grown from natural is with specialist equipment; no visual examination, including by expert gemmologists, can reliably distinguish them.

The cost of producing lab-grown diamonds by CVD fell dramatically through the late 2010s and early 2020s. In 2015, producing a 1-carat CVD diamond cost approximately £300 to £400. By 2022, the same stone cost approximately £50 to £100 to produce. By 2025, the cost had fallen further. The production cost trajectory follows the same curve as other semiconductor manufacturing processes — improving yields, scaled capacity, and learning curves drive costs down reliably over time.

The commercial consequence was that lab-grown diamonds moved from a premium-positioned alternative to mined diamonds (in the early 2010s, some retailers marketed lab-grown as an ethical luxury at close to natural prices) to a direct price substitute positioned substantially below natural equivalents. A 1-carat G-VS2 round brilliant natural diamond that retailed at approximately £6,000 in 2021 now has a lab-grown equivalent retailing at approximately £800 to £1,200. The price differential, which was narrow in 2015 and moderate in 2018, is now very wide.

Pandora's 2021 announcement reflected the moment when this differential became commercially meaningful at scale. Since then, Signet Jewelers (the largest jewellery retail group in the United States, trading as Kay, Zales, Jared, Ernest Jones, and H.Samuel in the UK) reported that lab-grown stones had taken significant share in the engagement ring category in its 2023 and 2024 earnings calls. The major fine jewellery houses (Tiffany & Co, Cartier, Van Cleef & Arpels, Bulgari) have maintained their position that they will not use lab-grown diamonds, which has helped differentiate the high-end market from the high-street market.

The price collapse in practice

The 30 to 40 per cent decline in natural diamond wholesale prices from the 2021 peak is not evenly distributed across the market. Understanding which parts of the market have declined most helps clarify what the current situation actually means for buyers and holders.

Most affected: Commercial-grade natural diamonds in the 0.5 to 1.5 carat range, G to J colour, SI1 to I1 clarity. This is the standard high-street engagement ring diamond. These stones have seen the sharpest price corrections because they compete most directly with lab-grown at the consumer level. The lab-grown equivalent is visually identical and considerably cheaper. The commercial-grade natural diamond's value proposition has been substantially eroded.

Moderately affected: D to F colour, VS1 and better, 0.5 to 2 carat range. Still better positioned than commercial-grade, but not immune to the broader market pressure. These stones have declined 20 to 30 per cent from their 2021 peaks.

Less affected: D-colour, internally flawless or VVS1, 2 carats and above, with GIA certification. The investment-grade tier of the market has held value better than commercial-grade, partly because the buyers in this tier are less price-sensitive and partly because the scarcity of fine specimens at large sizes creates genuine rarity value that lab-grown cannot replicate at scale.

Largely unaffected: Exceptional diamonds at D-IF and 5 carats and above, with notable historical provenance or extraordinary optical characteristics. The top of the market trades on irreproducible rarity and has not tracked the broad market decline.

The effect on lab-grown diamond prices has been more severe in percentage terms. Lab-grown wholesale has fallen approximately 75 per cent from its 2022 levels, with retail prices following. The 2022 lab-grown engagement ring market, in which some retailers were positioning lab-grown diamonds at 30 to 40 per cent below natural prices, has been replaced by a market where lab-grown is typically 70 to 85 per cent below natural equivalent price. The trajectory suggests further decline as production costs continue to fall.

What it means if you are buying now

For engagement ring buyers in 2026, the market transition creates a clearer than usual choice between two genuinely different propositions:

Lab-grown diamonds are now substantially cheaper than natural equivalents, visually identical, certified by the same gemmological laboratories, and appropriate for anyone who wants a beautiful stone and does not need it to retain or appreciate in value. The resale market for lab-grown is currently minimal — a lab-grown diamond bought in 2026 is unlikely to realise more than 10 to 20 per cent of its retail price on secondary sale. This is not necessarily a problem for a wedding ring worn daily for decades; it is a problem if the buyer's circumstances might require selling.

Natural diamonds at commercial grade are now cheaper than they were in 2021 (the price corrections benefit buyers), but have a weaker investment case than they had five years ago. The commercial-grade natural diamond's value proposition against lab-grown has been substantially narrowed to sentiment (it formed in the earth over millions of years) and modest resale premium over lab-grown equivalents. Neither is a strong financial case.

Natural diamonds at investment grade (D-IF or close, 1ct+, GIA certified, from reputable sources) retain the characteristics that have driven diamond value historically and are less affected by the lab-grown disruption because buyers at this level are not comparing to lab-grown. The price correction in this tier from the 2021 peak has been moderate rather than severe.

The advice I give when asked by readers who want a clear answer: if value retention matters to you, buy the best natural diamond you can afford in the smallest size that still looks significant, with GIA certification, and from a source that can provide a provenance chain. If value retention does not matter, lab-grown is a reasonable and honest proposition at the current price differential.

What it means if you own diamonds

People who bought diamond jewellery between 2018 and 2022 may be holding pieces whose resale value has declined from the price they paid. The degree of this depends heavily on what they have.

Insurance valuations from 2019 or 2020 are almost certainly overstating both the replacement cost and the resale value of commercial-grade diamond pieces. The insurance should be updated.

For fine natural diamonds in the D-VS2 and better range bought before 2021, the decline is more moderate and the pieces remain resaleable through specialist channels. See our guide on how to sell your jewellery for the practical routes.

For lab-grown diamonds purchased in 2021 or 2022 at prices that were then competitive but now look high relative to current lab-grown retail, the resale market is very thin. The practical approach is to wear and enjoy the piece rather than to think about resale. Lab-grown diamonds are beautiful stones; the question of what they are worth in 2026 is separate from the question of whether they are pleasant to wear.

Coloured stones: a different story

The diamond market disruption is largely specific to diamonds. Coloured stone markets (ruby, sapphire, emerald, and other fine stones) have not experienced comparable price pressure because lab-grown coloured stone production has not reached anywhere near the commercial scale of lab-grown diamonds.

While lab-grown rubies, sapphires, and emeralds do exist and are sold commercially, they are produced in smaller quantities, with less consumer awareness, and with less impact on natural coloured stone prices. The fine coloured stone market in 2026 is broadly stable to rising, with the usual drivers (origin, treatment status, certification) determining value as they have for decades.

The Argyle pink diamond closure (discussed in our piece on pink jewellery) sits in its own category: a supply-driven appreciation in a category where there is no lab-grown substitute of comparable collector appeal at present.

For buyers who are specifically concerned about value retention in a market affected by lab-grown disruption, fine coloured stones at investment grade represent an alternative worth considering, alongside the investment-grade natural diamond tier.

The De Beers question

One structural uncertainty in the natural diamond market that deserves a brief note: De Beers, the company most associated with the diamond's status as a luxury object (the "A Diamond Is Forever" campaign was a De Beers production in 1947, and the tradition of the diamond engagement ring in its current form was substantially a De Beers marketing programme), has been in ownership transition.

Anglo American, De Beers's majority shareholder, announced plans to divest its stake in May 2024. The sale process reflects Anglo American's strategic restructuring; De Beers has been loss-making at current diamond prices. The outcome of the ownership transition will shape the natural diamond market's marketing and supply management going forward, but the direction of travel is uncertain at the time of this guide's publication. Monitor developments through trade publications including Rapaport Diamond Report and IDEX Online for updates.

Frequently asked questions

Are natural diamonds a good investment in 2026?

The investment case for natural diamonds is weaker in 2026 than it was in 2018. Commercial-grade natural diamonds (the standard high-street engagement ring stones) have declined 30 to 40 per cent from their 2021 peak and face ongoing price pressure from lab-grown competition. Fine natural diamonds (D-colour, IF or VVS, 1ct+, GIA certified) have held value better and retain more of the historical investment case. Coloured stones at fine grades are a better store of value than commercial-grade diamonds in the current market.

What caused natural diamond prices to fall?

Natural diamond prices fell from their 2021 peak for two related reasons: the unwinding of the pandemic-era demand spike, and the structural price pressure from lab-grown diamonds. Chemical vapour deposition technology produced lab-grown diamonds at dramatically falling unit costs from 2020 onwards, making lab-grown a direct price substitute for natural diamonds at the commercial grade. Lab-grown diamond wholesale prices fell approximately 75 per cent between 2022 and 2025, pulling natural prices down through competitive pressure.

Should I buy a lab-grown or natural diamond for an engagement ring?

The honest answer depends on what matters to you. Lab-grown diamonds are visually identical to natural diamonds, currently cost 70 to 85 per cent less at comparable grades, and are an appropriate choice if value retention is not a priority. Natural diamonds at commercial grade retain a modest premium on the secondary market over lab-grown, but the premium has narrowed and the investment case is weaker than it was five years ago. Natural diamonds at fine grade (D-VS2 and better, 1ct+, GIA certified) retain the stronger investment characteristics and are appropriate for buyers for whom value retention matters.

Have diamond prices gone down?

Natural diamond wholesale prices are down approximately 30 to 40 per cent from their 2021 peak as of 2026. Lab-grown diamond wholesale prices are down approximately 75 per cent from their 2022 peak and continue to decline as production scales. The decline is most pronounced in commercial-grade stones (the standard high-street engagement ring range) and most moderate in fine and exceptional stones.

Is the diamond resale market affected?

Yes. The resale market for commercial-grade natural diamonds has weakened along with wholesale prices. Lab-grown diamond resale is currently minimal, as the secondary market for lab-grown is thin and declining lab-grown retail prices have eroded residual value substantially. Fine natural diamonds (D-IF, 1ct+, certified, from major auction houses) have maintained a more active secondary market, though at lower prices than the 2021 peak.

What should I do with diamonds I already own?

Check whether your insurance valuation is current — valuations from 2019 to 2021 are likely overstating both replacement cost and resale value of commercial-grade pieces. If you are planning to sell, use our guide on how to sell your jewellery to choose the right route. If you are keeping the pieces, ensure they are properly insured at updated values and well-maintained per our jewellery care guide.

Are coloured gemstones affected by the diamond market situation?

No significantly. The lab-grown disruption is largely specific to diamonds. Coloured stone markets (ruby, sapphire, emerald, tanzanite, and others) have not experienced comparable price pressure because lab-grown coloured stone production has not reached commercial scale. Fine coloured stone prices are broadly stable to rising in 2026 and follow the traditional drivers of origin, treatment, certification, and quality.