Let’s talk numbers. When it comes to diamond value, one of the most important factors to consider is how well a diamond retains its worth over time. Prices fluctuate widely based on carat weight, cut, clarity, color, and—perhaps most notably—whether the stone is natural or laboratory grown (also known as lab grown or synthetic).
Because there are so many variables at play, from grading specifics to market demand, pinpointing an average price for natural versus lab grown diamonds is nearly impossible.
What can be said, however, is that as lab grown diamond prices have declined rapidly in recent years, natural diamonds have come to represent a distinctly different product—one that is likely to hold long-term value, making it a meaningful financial investment.
The stark value difference comes down to one fundamental factor: rarity. Natural diamonds, formed deep within the Earth over billions of years, are inherently scarce. This limited supply contributes to their long-term value. In contrast, lab grown diamonds can be mass-produced in controlled environments, making them more readily available and less valuable. Ahead, we explore what determines a diamond value.
The 4Cs: How Diamond Value is Determined
A diamond’s worth is largely influenced by the 4Cs: Carat, Clarity, Color, and Cut. These attributes define how rare and unique a particular diamond is, making them essential when considering a diamond’s resale potential.
Carat (Weight)
Bigger is rarer. Larger diamonds are considerably harder to find, so their value increases exponentially with size. For example, while a 1-carat natural diamond may be priced at $5,300, a 2-carat natural diamond can command a significantly higher price, often surpassing $9,000 or more, depending on quality.
Clarity
Fewer flaws, higher value. A diamond’s clarity is measured by how free it is from internal inclusions or external blemishes. The closer a diamond is to being flawless, the rarer—and more valuable—it becomes. For instance, a 1-carat natural diamond with G color and SI2 clarity might cost around $4,000, whereas a flawless version of the same diamond could exceed $8,000.
Color
Diamonds are graded on a scale from D (colorless) to Z (noticeably yellow or brown). The closer a diamond is to D color, the more valuable it is. For example, a 1-carat diamond with G color may cost $4,000, but if upgraded to D color, the price can jump to $6,000 or more.
Cut
Precision matters. The cut of a diamond affects its brilliance and overall appeal. While it may not be as influential as the other Cs in determining base value, round brilliant cuts are often priced higher due to the craftsmanship required to perfect their sparkle.
When it comes to fancy color diamonds, the rarity factor becomes even more extreme. A 1-carat pink diamond can cost over $100,000 due to its natural scarcity. Blue, green, and red diamonds also have significant value due to their extreme rarity.
Diamond Resale Value
One of the key advantages of natural diamonds is their strong resale value. While all diamonds depreciate slightly after purchase, high-quality natural diamonds can retain or even appreciate in value over time, making them a compelling asset. The resale market for natural diamonds is largely influenced by the below factors.
Market Demand
Rarer diamonds, especially those over 1 carat or with exceptional clarity and color, are always in demand.
Rarity
The scarcity of natural diamonds ensures they maintain value better than mass-produced alternatives.
Certification
Diamonds with GIA certification tend to fetch higher resale prices.
Condition
Well-maintained diamonds in their original setting often hold greater resale appeal.
On the other hand, lab grown diamonds can be produced endlessly, and their supply is virtually unlimited, making them a less attractive investment option. In most cases, those attempting to trade in a lab grown diamond may receive offers far below the original purchase price—if they can be traded in at all.
Are Diamonds a Wise Investment?
For those considering diamonds as an investment, natural diamonds offer stronger long-term value retention. Unlike lab created alternatives, which face price instability due to ongoing advancements in production technology, natural diamonds hold an intrinsic worth tied to their rarity. Many investors look to natural diamonds as a tangible asset, much like gold or fine art, due to their historical stability and consistent demand in the luxury and jewelry markets.
While diamonds may not be as liquid as stocks or bonds, high-quality stones can serve as a reliable store of value. Additionally, the growing interest in rare fancy color diamonds—such as pink, blue, or green diamonds—suggests that certain segments of the market may even appreciate over time.
When purchasing a diamond, whether for personal enjoyment or investment, natural diamonds remain a superior choice for those concerned with value. Their scarcity, durability, and resale potential make them a timeless asset.
If you’re looking to sell or trade your diamond in the future, ensuring it has strong resale factors can make all the difference. With a continued focus on quality and rarity, investing in natural diamonds remains a smart and stable choice for those who value beauty, tradition, and lasting worth.
