Synthetic diamonds are driving demand for natural coloured stones
At the beginning of the 20th century, when mass production of cheap Verneuil synthetic rubies and sapphires started, and again in the 1980ies, when the first seriously "dangerous" synthetics (Chatham, Knischka, Lechleitner, Ramaura e.a.) hit the markets, there was great concern that natural gem prices would plummet.
Well, as we all know, this did not happen.
In the case of synthetic diamonds, which are currently entering the market in large volumes, the situation appears to differ markedly. Prices for natural diamonds have declined significantly - due not only to weakening demand in the sluggish Chinese and U.S. markets, but primarily to the extremely competitive pricing of synthetic alternatives. Additionally, the strategically marketed narrative of "sustainability" by synthetic diamond producers has undoubtedly contributed to this trend.
Conversely, both demand and prices for certain coloured gemstones - particularly the traditional classics ruby, sapphire, and emerald - have risen remarkably over the past five years.
An article published in the latest edition of Prism magazine, issued by the American Gem Trade Association (AGTA), highlights an intriguing correlation.
In response to the diminishing value of their diamond inventories, American diamond dealers - as well as jewellers - are increasingly turning their attention to coloured gemstones. A number of firms that previously dealt exclusively or primarily in diamonds or diamond jewellery now report that up to 50% of their inventory comprises coloured gemstones or coloured gemstone jewellery.
This significantly expanded offering is further stimulating demand, a development clearly reflected in import statistics. According to the U.S. Bureau of Economic Analysis (BEA), American diamond imports declined by 54% between 2020 and 2024, while imports of coloured gemstones increased by 136% over the same period.
It can therefore be concluded that, contrary to initial concerns, the advent of synthetic coloured gemstones has not triggered a decline in prices for their natural counterparts. Rather unexpectedly, however, the rise of synthetic diamonds has propelled the market for natural coloured gemstones to new heights.
We’re not complaining. From our perspective, this is a welcome development - we bought at the old prices and can still sell at those prices accordingly.
For younger colleagues, however, the situation is certainly more challenging…
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