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Will Diamonds Lose Value?

Will Diamonds Lose Value?

It’s quite common that people fear that their valuables will lose value as time goes by. By that logic, diamonds aren’t such a different story.

Well, you’d be delighted to hear that if you’re asking will diamonds lose value, the answer is disappointing.

Diamonds retain their value or even have a slight incline in their value over time, but just if they’re in the possession of someone who’s a licenced diamond dealer.

Regardless of some unpredictable conditions on the market, these precious stones do resist and keep their value and seem to not mind the market oscillations.

There are a few reasons for this since the market is not that simple when we’re talking about diamonds, and that asks for a deeper explanation.

For those who are keen on finding out those reasons and learning a thing or two about diamonds’ value that you maybe didn’t know earlier, I highly suggest you keep reading!

Why Are Diamonds Valuable?

The value of a diamond is based on a few things. These are the most important things when I talk about the depletion of the value of diamonds as well.

The first thing is the rarity of the diamonds. Diamonds are naturally made by pressurizing carbon. This process is hardly mimicked and doesn’t provide the same results.

Some people have tried to make fake diamonds by doing this, but all without success. So, the first thing why diamonds stay valuable and don’t lose value is that they’re hard to make.

The other fact is that they’re pretty hard, in fact, they’re rated as one of the hardest materials on earth (which does not mean they’re indestructible).

The popularity of diamonds is also a huge factor when we talk about their value and price. When jewelers started putting diamonds into jewelry, they started to gain popularity.

This did not happen recently, as some of the oldest jewelry items that have been discovered contain precious stones inside them.

So now that you know the three main reasons why diamonds are valued as much as they are, let’s talk about the market.

Market Value

Some of you that bought a diamond or two in your life might have noticed that diamonds don’t vary in price that much.

The biggest difference in price when it comes to diamonds is seen when they’re used in different jewelry. What I mean by this is that if two of the same diamonds are encased in gold, but one is encased in gold of higher quality, it will have a bigger price tag.

Otherwise, two of the same diamonds, even if bought from different diamond dealers, hold pretty much the same price.

When I’m on the topic of market value, it’s also quite important to say that when you buy a diamond for your personal collection, it will lose value over time just based on the fact that you’ve bought it.

What I mean by this is that their resale value will be lower than when you bought it. You can’t prevent this since the market operates in that way.

If a diamond is in the possession of a person and not a seller or a dealer, people will automatically value it under its real value even if you’ve held it in a case or a bag all the time and never wore it once.

This goes for jewelry that contains diamonds as well, so rings, necklaces, crowns, and other precious items containing a diamond will drop in price if they were in the possession of a person that’s not authorized to sell diamonds.

It’s quite unfortunate that this is how the market works since some people do keep their diamonds intact for years, and when they want to sell them, they lose over half of the price sometimes.

Nothing can be done about this situation since it’s the only way diamonds technically lose their value and for a good reason.

If someone isn’t authorized to sell diamonds it should automatically mean they don’t get the full price, especially if that’s the second or third hand of reselling.

The market just functions that way, and there’s nothing you can do about it in case you have a diamond that you would like to sell.

In comparison, other things similar to diamonds (other precious stones, gold, or silver) also lose their value when you are reselling them, so I wouldn’t be upset if I were you since that’s just the way the market works.

The only way that an old diamond that has been in someone’s possession for years can gain value is if it’s a part of a special collection that gains value just because of its name or the artist that made that particular collection.

If you think of selling one of your grandparents’ diamonds thinking it has some additional value, I’ll have to disappoint you.

Most diamonds lose value, and those who don’t are quite rare and are probably in the possession of some collector or someone who knows the value of their diamonds.

The market is quite an unforgiving place, and a diamond that you or somebody else paid a hefty amount for it is now valued under half of its original price just for one reason – it has been in the possession of another person.

You have to be ready if you’re looking to get into diamonds, since this is how the “diamond world” functions.

Learn More:

What Diamonds Don’t Lose Value?

As I’ve mentioned earlier, there are some diamonds that don’t lose value and even gain some value over time. These are primary diamonds from special collections, or diamonds with a backstory.

What do I mean by that? Well, for example, diamonds that were in the possession of a royal family or a famous person that passed away a few decades ago can have a hundred times their real value just for that reason.

Don’t get confused, these diamonds are probably in the possession of a museum or a house that has some relation to those people.

If you’re lucky enough to have a diamond or two that used to be owned by people with great historical importance, those diamonds might actually be worth something.

It’s probably best if you sell them in an auction center, and not in jewelry, since that’s where you’ll get the most money out of your item.

The fact that diamonds are quite hard to come by taking into consideration the process that needs to take place in order for a diamond to be created, some diamonds that weren’t owned by anyone before you should also have some value if kept in proper packaging.

This is also quite a rare case since the chance of you being the first owner of a diamond is probably smaller than the previous case.

The only way to do this is to directly buy the diamonds from the people who extract them, and the process that you need to undergo for that is quite complicated and not available to everyone and anyone.

The third scenario is if you own a piece of jewelry that has a diamond or multiple diamonds inside it but the value goes up because of other precious stones or metals that are also a part of that piece of jewelry.

This might not seem like something that has many connections to the diamonds’ value, and that’s because it doesn’t.

If, for example, you have a gold necklace that also has a diamond inside it, and the price of that necklace goes up, it’s probably because the price of gold went up, and not because of the diamond.

These are also quite rare cases, but still technically possible, since the amount of gold available to people is limited and the more people buy it, the more expensive it gets.

Read Also: Why Is Gold Cheaper Than Diamond?

Other Market Options

Diamonds are used for some other purposes in other industries, so you might be lucky and get some money out of them by selling them to people who use diamonds in other professions.

For example, diamonds are used to make polishing and cutting tools due to their durability and hardness, so people in other industries that use polishing and cutting might be after diamonds at some times.

Diamonds are hard to come by, so if you wait for that moment, someone who uses a diamond to make their product may overpay for your diamond and you might get some additional profit from it.

It all depends on what you’ve paid for that diamond, and what you’re asking as well.

These cases are extremely rare since these people get their diamonds from their regular supplier, and not from people that own diamonds, but in some cases, they might come across you and they might want to buy your diamonds.

Another potential option for turning a profit on your diamonds is to sell them to people who make custom jewelry. Since they don’t want to pay the full price for a diamond since that leaves little to no room for them to make a profit, they often go for second-hand diamonds that are in excellent condition.

Since it’s not hard to keep a diamond in good condition considering its durability and toughness, you might be in luck here. The number of these custom jewelry businesses rises every day, and your chance to get a good price for your diamond increases.

Otherwise, your diamond will lose value 100%.

Related Read: How Do I Value My Diamond? Identifying The Diamond Quality

Will This Ever Change?

Sadly, like with all valuable things, the fact that they lose a good portion of their value the second they leave the store will probably never change. This is how the market has been from its beginning and that’s how it will be until the end.

People who manipulate and control the market also like to get their profit, and if you get to sell your diamonds for the same or even higher price than what you bought them for, it wouldn’t leave anyone else much room for profit.

So, if I were you, I wouldn’t get your hopes up too much. 

It’s quite a confusing situation, since these precious stones are quite hard to excavate from the earth or from the ocean’s floor, but are quite easy to buy in a jewelry store.

This makes them accessible to anyone with the right amount of money in their wallet, but as soon as you walk out of the store with your newly bought diamond, it loses almost half of its value.

So to answer the question “will this ever change?” – it’s almost impossible for this situation to change.

See Also: What Is More Valuable Than A Diamond?

To Sum Up

There was a lot to cover here since people don’t actually differentiate between diamonds that are held in jewelry stores and diamonds that are in private possessions.

Unfortunately for most of the people that have asked the question will diamonds lose value the answer is positive taking into consideration that most of the people who are reading this think of the diamonds they have in their private possession.

The market dictates that only diamonds that haven’t been sold in jewelry or otherwise hold their value or even could gain a little value. Even if diamonds are hard to come by and are quite rare in nature, these precious stones don’t hold value if held in private collections.

If you take everything I’ve said into consideration you should probably hold onto your diamonds or jewelry that contains them and wait to pass them on to somebody instead of selling them for profits since the chances of you getting some extra money for them are slim to none.

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