Soaring interest rates and competition from lab grown diamonds has forced prices for the precious stones to plunge more than 30 per cent since the start of last year. But those in the business say the industry will ensure diamond prices don't keep falling.
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00:00 Diamonds have long been adored thanks to clever marketing.
00:05 After surging during the first two years of COVID, prices for natural diamonds have been
00:10 losing their sparkle.
00:12 The global Rapnet diamond index for a one-carat white stone fell 10.7% in 2022, and from January
00:21 1 to November 1, it plunged 21.3%.
00:25 The price decline began about the same time central banks started hiking interest rates.
00:31 Diamond prices certainly are highly correlated with GDP growth.
00:35 But it's not the only cause.
00:38 Lab-grown diamonds have been rising in popularity since early last decade.
00:43 So much so, diamond giant De Beers got in the game in 2018.
00:47 There was some speculation that was this a strategy to undermine, meant all the other
00:53 producers would have to come and match their prices and as a result probably go broke.
00:58 The price of manufactured diamonds has dropped even more than natural stones, and the gap
01:03 between the two is widening.
01:05 De Beers no longer sells lab-grown diamond engagement rings.
01:09 For artisan jewelers, there's nothing like working with a natural diamond.
01:14 Rowan Milne says falling prices haven't had such an impact here.
01:19 We don't see that big a fluctuation because we're still buying it in US dollars.
01:24 But he expects rough diamond traders will manipulate the market to push prices back
01:29 up.
01:30 They'll probably hold off on some of the rough that's coming to the cutters.
01:33 I would expect that there'll be a stabilisation within the natural diamond market.
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