Future value, positioning of mined diamond

[Double E]

With more reputable, trusted, precision cut and performance oriented vendors participating in the lab grown diamond market, how will mined diamonds hold their value? Will their long lasting position in the gem trade be moved and how?

This looks like a topic hanging around for such a long time, but with BGDs recent announcement, and the fact that there have already been names like Jon, Wink (I recalled that Wink had once mentioned he might be looking into CBI cut LGD before he finally decided to take a break) involving, I believe it’s a good time to talk more about it.

There’s already noises from many consumers, How’s the thoughts of you guys in the trade, jeweller, cutters / diamond cut designers , heads of large authorities etc.?

 

[Wink]

@Double E, I expect there to always be a market for naturals and well above the price for lab grown.

Many, many years ago I sold custom cut CZ's and did extremely well with them. I never bought into the costly moissanite, but I know there was a good market for them too.

For many years I stated my opinion that the Lab grown diamonds were vastly over priced. At the time, they were. I still greatly disagree with the producers trying to link the cost of a lab grown with the cost of a natural diamond and that is beginning to change as the prices are now well within what I think is reasonable.

I know of at least one vendor who is selling GCal 8x certified lab grown diamonds. I have seen a few and they are incredibly beautiful.

I have often stated that with diamonds the cut is more important than the color or the clarity. I have actually seen a natural D-IF that was cut with a 56 or 57 degree depth to keep it over the 2 ct weight and it was a lifeless lump of carbon that sold for many thousands of dollars more than it was worth in my opinion.

I believe that cutting is the key for all transparent gemstones. Diamonds, lab grown or natural, rubies, amethyst, citrine, sapphires, tanzanites, tsavorites, spinels and emeralds all better when they are well cut.

 

[Karl_K]

No one knows and anyone that says they do know are just guessing!
That said my guess!
My guess is that for while mined higher graded goods are going to increase in price but lower graded goods like i2/i3 are going to get hammered maybe even into the si range. A lot of PSers me included are going to wince at throwing color in there but the result will likely be the same as clarity as long as the notion is common that no color is better.
I think on the general market ijklmno and lower non-fancy colored mined goods are going to get harder to move when competing against higher graded mmd.

So my guess is D-H vsX or better mined non-melee goods up in price. Everything else becomes a hard sell until you get into fancy colored diamonds which are a market in their own.
Melee I see it reaching a point that its the same price mined and mmd in mixed lots and no one cares.

 

[Wink]

I like to think about things, and @Karl_K gives me many things to think about in his post.

I hope that you are correct, Karl, about I2 and I3 getting hammered. Perhaps they can once again be relegated to industrial strength sandpaper...

While I think you are right about the lower colors being harder to sell, especially on line, I find them very easy to sell in house when they are properly cut. So many people resist taking a look at them on line, as they are led to believe they will not be beautiful, but in house, they jump up and like a frisky puppy, make you want to take one home. (I personally wear a wonderful P color that was supposed to finish a Q. The cutting "improved" the color. I may be one of the few jewelers in the world to be disappointed with receiving a color upgrade at the lab.)

Many years ago, I had a custom cut D-IF of 2.09 and a custom cut J-VS1 of 3.1x cts in house for a couple of weeks until I could arrange to get them delivered.

During that time I showed them to about 20 ladies, showing both on a slotted tray side by side and without saying anything about color or clarity. I asked them which they liked better. Only 2 of them chose the 2 ct D-IF. The scary thing to me was that I too liked the 3 ct J better. This bothered me, as I KNEW I was supposed to like the D better, after all I am a GG and a diamond "expert".

I called Jim Caudill at the American Gem Society Laboratory and asked him his thoughts on this "bizarre" preference. He laughed and told me why. "Wink, the human eye likes sparkle! The 3 ct, being equally as well cut as the 2 ct has larger flashes of both white and colored light. In addition, there just appears to be slightly more contrast between the J and the flashes of light. This has been a topic of conversation here at the lab, especially in the top cut diamonds."

RE:

Melee I see it reaching a point that its the same price mined and mmd in mixed lots and no one cares.

Here I disagree with you. I do not think the price will ever be the same, and I KNOW that as long as I and honest diamond dealers are still alive, we will care! Right is right, and the slimy (expletives deleted) who are mixing in lab growns into diamond melee parcels are just dishonest dirt bags. So long as they can be identified, honest dealers will care and will not knowingly sell mixed lots.

I will also say that historically, creation of a good looking synthetic has nearly always pushed the price of the natural higher. I say nearly, as the synthetic quartz is so difficult to identify that it has kept the price of amethyst in check.

However, rubies, sapphires, emeralds, chrysoberyl, etc., have always gone up after creation of a good synthetic. This was especially true with gems like the star ruby and star sapphire. The Linde Stars created a huge increase in demand for the natural gems.

Thanks for giving me so much to think about Karl,

Wink

 

[nala]

I’m not in the trade, but I like to collect different shaped diamonds and except for my Ering- always buy preloved. I used to safely buy these stones uncertified and relying only on a diamond tester and my eyes. Now, I can’t do that. I go pawn shopping a lot and so far only one shop claims to have a tester that differentiates between lab and natural. I don’t trust that all lab growns in the secondary market are inscribed as lab. Some may have entered the market without these inscriptions. I insist only on earth mined stones so needless to say, my days of hunting for a diamond in the rough have abruptly come to a fast halt. When I shop these places, I refuse to buy bc they can’t guarantee me that they are not lab and yet, the price has not adjusted for this possibility in the pawn market like it has for gemstones. When I go to pawn shops, they sell rings with gemstones and never specify the type of stone bc very few have the knowledge to do that. It’s up to the customer to know and usually the rings are so cheap bc they sell for gold weight. So I do have quite a few gemstone rings that I paid near scrap for and could send to gia and dream they are the real deal. All this to say that I don’t go to a jewelry store to buy a lab gemstone and pay full price for it—I lose interest in it immediately. As perfect as these lab stones are, they don’t seem rare and unique enough and for me, that is a draw. Natural stones feel special and will always have a market by people who are willing to pay for that. (My sister, for example, is in the market for studs and refuses to consider lab grown. She was just gifted her first ACA a couple of years ago so it’s not like she is a diamond connoisseur but she just knows that she wants natural even if they cost four times as much as right now.) But if the mystery of it being natural and a deal is a possibility, I buy the ring at a pawn shop hoping to hit the lottery one day. Perhaps when I have ample time I will submit to Gia and see what I have accumulated. But if I knew right away that I had purchased lab stones, there would be no mystery and no secret treasure to unbury.
As for pricing on lab, when I upgraded to my 2.9 gia, the difference between lab vs earth mined was about one third in savings. Now, my natural has gone up in price and the lab has plummeted to the point that I would be crying if I had gone lab. True story. I think a lot of pro lab posters who speak of savings and cost jumped into the market at the right time—now when there is so much competition that prices on labs are inexpensive. But that wasn’t always the case for some of us and I for one am relieved that I went with natural.

 

[Karl_K]

Wink,
My reasoning is that the rough is a teeny tiny fraction of the cost of melee. Handling and cutting is the vast majority of the cost. Therefor there is no real value or cost difference between mmd and mined melee.
Claiming it to be mined and mixing in mmd is very slimy %#%!%##!#$#$@#$

 

[Wink]

Yes, the cost of the rough is minor. Still, houses like Grunberger buy the rough and cut it all to AGS0 proportions. It costs more than ordinary cut melee. They know their rough is natural, and believe me their clients care that they know.

There will always be those who care about the natural origin of their diamonds, just as there will be a huge market of those who do not want to spend for the natural when the lab grown are so much less expensive.

What I am hoping to see is the market for both be healthy and strong. A lab grown diamond, well cut and identified as lab grown and sold at a lab grown price is not at all the same as someone selling a knock off Hermes scarf as a Hermes scarf.

with proper integrity from the start, there is no reason for one market to exclude the other.

 

[oncrutchesrightnow]

Not a vendor… prediction: there will be a split by age. 20-something’s right now are surrounded by friends who are getting 1.5 ct white, clean LGDs ant it would be hard to accept a 0.7 instead. Agree that low-color will take a hit online and that well-cut low-color will sell better in person — but even then it’s hard to overstate how much young people care about color. In my circle of friends, people presume any hint of color is a sign that they sacrificed for size and is considered embarrassing.

 

[Wink]

This has long been an issue, some cultures more than others.

The really sad thing is, when I display 3 to 5 well cut diamonds on a slotted tray and say nothing of color, a very high percentage will select an H-I-J color as the diamond that pleases them most.

On the other hand, some of my clients have incredible color perception and want only the D-F colors. Ask @RunningwithScissors to tell you her story about color selection. She has absolutely incredible color vision.

Wink