GIA Dunks on Lab Diamonds

[nala]

It makes sense. Making lab diamonds super affordable while at the same time, repeating to customers that they are dropping in value and no trade-in’s are allowed —why would anyone even want to pay or need a certificate? What would be the value?
And not to sound elitist but also, is the target market for labs as concerned with the 4 C’s? Or just the 5th C—cost.

 

[Ibrakeforpossums]

This, this wonderful thread is why Price Scope can't go away. I've said this before but I would happily pay a subscription to keep this alive.

 

[Ibrakeforpossums]

I personally don't expect anything of an enduring nature. GIA will take a PR hit in some quarters, and there will be a lot of grousing. But the move is in step with the overall evolution of the product. So I think any furor will subside in time.

GIA knows their move will benefit their competitors in the short term and they are ok with that because they are playing the long game.

Is it encouraging to think that GIA believes there will be a long game? Garry is always taking swings on Linked In at posters who say the natural industry is on its way out.

 

[Sunrises Sunsets]

It sounds like the last gasp of a 800lb gorilla to destroy a market in which they are getting kicked to the curb by the competition.
Consumers have decided they like grading and see them as acceptable replacements for natural diamonds in many cases.
That some in the industry are trying to bully consumers again is no surprise.
De Beers already tried and failed, now its GIAs turn to fail.

I already avoid looking at lab stones with GIA reports online because they almost always have transparency issues.
This will just make me avoid them entirely.

Excellent synopsis, Karl. I kick GIA reports to the curb when perusing lab diamonds. After GIA's years in the natural market and some of the diamonds that received "excellent" evaluations and, IMHO, weren't, left me nonplussed. I regard IGI reports much higher in value in my eyes.

 

[Texas Leaguer]

This is not a perfect analogy, but the issue does pertain to a technology product, not the natural gems that have traditionally been core to the GIA mission. As a technology product with a product life cycle, it is a little like a software developer ending support for an early version of a software program. At some point they decide to redeploy the resources to better support their current offerings.

 

[Karl_K]

This is not a perfect analogy, but the issue does pertain to a technology product, not the natural gems that have traditionally been core to the GIA mission. As a technology product with a product life cycle, it is a little like a software developer ending support for an early version of a software program. At some point they decide to redeploy the resources to better support their current offerings.

If they had just stopped grading them then it would be shrug whatever.
To grade them and issue not even good for toilet paper reports is a problem.

 

[MissGotRocks]

I assume there would be a different price between the old report and the newer version for labs. Could it be that with their prices dropping, vendors don’t want to tag on any more additional cost than necessary? I am assuming that the cost of the report gets passed onto the consumer?

 

[Texas Leaguer]

I assume there would be a different price between the old report and the newer version for labs. Could it be that with their prices dropping, vendors don’t want to tag on any more additional cost than necessary? I am assuming that the cost of the report gets passed onto the consumer?

I would not assume that the cost of the report will be reduced, though it might be.

My guess is that, knowing the likely outcome of their action, this is GIA's way of saying we are out of the synthetic diamond grading business, without saying we are out of the synthetic diamond grading business.

But, they are prudently giving themselves a period of several months before they actually discontinue 4C's grading, during which time they may re-calibrate, depending on how they see the market behaving. They could easily delay it or scrap the idea altogether. But I don't think it is a pure trial balloon. I think they are pretty sure this is the right path for them, but timing could be subject to change.

 

[Garry H (Cut Nut)]

Pretty much everyone's questions and comments are right on the money.
1. yes it is about money - they must make the reports cheaper - they cost more than the diamond now in many cases - e.g. under 1ct. And make up more than 1/3rd over many 1ct stones. IGI has lower operating costs - more efficient etc.
2. Retailers do not like tall the techy info on the reports
3. They want to hear what the manufacturers (who pay the ferryman) want and are prepared to pay.
I monitor wholesale platforms and crunch data (see my linkedin page). I have twice done color clarity comparisons and the median color and clarity of all sizes in rounds went from F VS1 to now E-F VVS2.
Of course that would be lower if proper transparency was graded.
So the need for grading is moot.

 

[oncrutchesrightnow]

I just pains me to hear about people buying $500 3 ct lab diamonds and then spending $4500 on the setting. But that's just me-maybe I'm an old fogey.

Honestly that’s where this whole trend might be headed. A small number of consumers who will want to own a holy grail natural diamonds.

These are great points.


Combine those two (concern over blood diamonds and the environment) and that is a massive impact on the market segment who are in a position to be engagement ring shopping.

Today’s youth take environmental concerns much more seriously than adults would have predicted.

Good points.

With regard to IGI, lab diamonds most definitely raised their profile and they managed explosive growth very well. One of pricescope's own, John Pollard, gets some credit! It will be interesting to see if they can leverage that big reputational bump to make further inroads in the natural diamond grading space.

Maybe IGI will take the initiative to add more information to their reports, like transparency and magnetism and undertones. Rather than be afraid to fall short of GIA’s color grading, be aggressive in establishing standards for fancy color LGDs. Then a vendor could take advantage of those reports to offer consumers even more options to personalize their choice.

It makes sense. Making lab diamonds super affordable while at the same time, repeating to customers that they are dropping in value and no trade-in’s are allowed —why would anyone even want to pay or need a certificate? What would be the value?
And not to sound elitist but also, is the target market for labs as concerned with the 4 C’s? Or just the 5th C—cost.

I think for a special jewelry piece, people will care about the general grade of color and clarity.

 

[lulu_ma]

Today’s youth take environmental concerns much more seriously than adults would have

LGD manufacturers have done a great job of greenwashing. This doesn’t look very eco-conscious to me.

Antique diamonds and estate diamonds would be much more sustainable…



ETA: people who want labs should absolutely buy them-but I do not believe the eco-friendly spin one bit.

 

[freddyboston]

LGD manufacturers have done a great job of greenwashing. This doesn’t look very eco-conscious to me.

Antique diamonds and estate diamonds would be much more sustainable…

ETA: people who want labs should absolutely buy them-but I do not buy the eco-friendly spin one bit.

Takes a lot of energy to make to all those "Eco" / not Mined diamonds....
China and India big Coal users.....

 

[Garry H (Cut Nut)]

Takes a lot of energy to make to all those "Eco" / not Mined diamonds....
China and India big Coal users.....

Indian Minister of Coal and Mines, said that of the total 226 deaths, at least 53 took place in 2020, followed by 51 in 2021, 28 in 2022, 41 in 2023 and 53 1in 2024.

 

[oncrutchesrightnow]

@freddyboston @lulu_ma It’s a rough situation with some rich countries needing LGD for tech but having strict environmental protections, and other less wealthy countries having fewer environmental protections but good LGD production capability.

 

[WillyDiamond]

As usual Brian reports interesting material.
Reading GIA’s announcement they will grade the diamonds either “premium” or “standard”. When a diamond falls below Standard, they won’t grade it. Perhaps this will help the consumer because it is less confusing. I don’t know about the rest of you but to the lay person all these clarity designations make my head spin (VVS, VS, SI, etc). GIA is also saying that the quality of LGD is quite high vs. years ago. That is their claim. Finally, perhaps the GIA announcement is moot, according to the CEO of GIA, they only grade 5% of LGD’s. Perhaps I am missing how this change at GIA causes the consumer to not have enough information when choosing a LGD.

 

[distracts]

I had an interesting chat with a jeweler today. He carries a smattering of lab grown pieces. He said that lab diamond hit rock bottom recently and bounced back up a bit-which I found interesting.

I just pains me to hear about people buying $500 3 ct lab diamonds and then spending $4500 on the setting. But that's just me-maybe I'm an old fogey.

IIRC, you are more a diamond person, yes? So you are used to seeing the center stone price much higher than the setting. Over in the CS forum, that's frequently not the case - though it's been a debate over the years of how much people are willing to spend on a setting for an inexpensive stone. For many people, the answer is "a lot" to get the overall look they want. So that doesn't bother me at all as someone who has definitely done that before! I mean, heck, my engagement ring setting was about 3x the cost of my center sapphire, so I started out my fine jewelry adventure that way.

I think what bugs me the most is once again GIA instead of giving consumers what they want is trying to tell consumers what they should want.
GIA wants to be the gold standard yet they try and dictate what consumers want instead of serving them.
There is no reason for the other labs to follow at this time.

I think this is a problem the diamond industry as a whole has suffered with labs. Many people seemed to fail to realize that most people are buying diamond jewelry to check an item off a to-do list, not because they are passionate about diamonds.

I think a bifurcated market is inevitable - There are many people to whom natural diamonds still appeal. Probably, as has been mentioned, luxury consumers in general. These people may also buy lab diamonds as fashion jewelry or to fit specific purposes. Then people with less money or who care less about diamonds or luxury goods will just go for lab diamonds.

 

[Dreamer_D]

These are great points.

There were also other wild cards like that Leonardo DiCaprio film Blood Diamond. I didn’t see it. I don’t actually know many people who did see it, but good grief everyone can tell you about blood diamonds and many MANY people think the worst of the mined diamond industry and that it’s all an ethical quagmire.

Not sure where the “labs are better for the environment” thing got started but it’s a hell of a way to market to younger people.

Combine those two (concern over blood diamonds and the environment) and that is a massive impact on the market segment who are in a position to be engagement ring shopping.

Nobody mention the environmental and human rights costs of mining metals for cell phones!

Anyway, yeah. Heck of a marketing campaign. And the evangelism for labs aggravates me too.

Regaining projections, might the people pushing labs and the people dependent on natural diamonds be economically distinct to a large extent? I don’t mean jewellers, but suppliers. Or the people pushing labs don’t care about long term they just want to pillage profits short term.

 

[Garry H (Cut Nut)]

GIA is also saying that the quality of LGD is quite high vs. years ago. That is their claim. Finally, perhaps the GIA announcement is moot, according to the CEO of GIA, they only grade 5% of LGD’s. Perhaps I am missing how this change at GIA causes the consumer to not have enough information when choosing a LGD.

I did the numbers on leading natural and lab B2B platforms a few hours ago.
64% of lab diamonds are DE and Flawless to VS1. Up from 50% +F +VS1 a year ago.
Only 16.3% of Natural diamonds are of that extremely high quality.

 

[Dreamer_D]

First I’d like to give a slow clap for some epic snark in this thread:

It sounds like the last gasp of a 800lb gorilla to destroy a market in which they are getting kicked to the curb by the competition.

So, ethically, it's like "Ew, Tesla...but sign me up for Starlink!"

Maybe jewellers can advertise their mounts and throw in the lab diamond for free.

I might be wrong but in this scientific age of sending spaceships into interstellar space and controlling them over billions of miles, it seems like a transparency grade for diamonds could be developed.

From my perspective, the diamond industry is like a bunch of headless chickens roaming around...

To grade them and issue not even good for toilet paper reports is a problem.

And second my interest in this whole phenomenon is social psychological, not economic, so for me I am very interested in how the symbolic and cultural meaning of diamonds shifts over time. It’s very hard for me to imagine that synthetic diamonds will simply eliminate the long history of cultural and symbolic meaning of diamonds as a luxury symbol. Rather, I can see the allure of lab diamonds fading when they are available at every TJ Maxx. For much the same reason that CZ never took off as a true replacement for diamonds in all but a narrow area of the market. Because sure, diamonds are about beauty, but they all also a symbol of class and wealth, and cheap mass produced goods don’t have that symbolism. If this analysis is correct, then GIA may be ahead of the curve in staking its territory in the luxury domain. Anyway, I am looking forward to seeing how it all plays out. Maybe natural diamonds will indeed go the way of spices as a status symbol of the past. But I doubt it.

 

[Garry H (Cut Nut)]

First I’d like to give a slow clap for some epic snark in this thread:












And second my interest in this whole phenomenon is social psychological, not economic, so for me I am very interested in how the symbolic and cultural meaning of diamonds shifts over time. It’s very hard for me to imagine that synthetic diamonds will simply eliminate the long history of cultural and symbolic meaning of diamonds as a luxury symbol. Rather, I can see the allure of lab diamonds fading when they are available at every TJ Maxx. For much the same reason that CZ never took off as a true replacement for diamonds in all but a narrow area of the market. Because sure, diamonds are about beauty, but they all also a symbol of class and wealth, and cheap mass produced goods don’t have that symbolism. If this analysis is correct, then GIA may be ahead of the curve in staking its territory in the luxury domain. Anyway, I am looking forward to seeing how it all plays out. Maybe natural diamonds will indeed go the way of spices as a status symbol of the past. But I doubt it.

What a wonderful expose or point of view Dreamer.
There are two distinctly different issues when comparing synthetic diamonds to natural diamonds.
Firstly: they are both actually diamonds. Consider that in may respects Moissanite is superior to diamond but went nowhere.
Secondly: lab marketing has cut through that they are more eco friendly than natural diamond. If that's all true is of course debatable, but is a fact in many younger buyers minds.

 

[WillyDiamond]

I did the numbers on leading natural and lab B2B platforms a few hours ago.
64% of lab diamonds are DE and Flawless to VS1. Up from 50% +F +VS1 a year ago.
Only 16.3% of Natural diamonds are of that extremely high quality.

Garry, are you then saying that LGD’s are the way to go?

 

[Garry H (Cut Nut)]

Garry, are you then saying that LGD’s are the way to go?

The way to go depends on the person Karl.
I am pointing out the huge difference in products.
There is no need to grade lab or synthetic diamonds. They really should be branded like any other consumer good.
There is no rarity factor - which is the only reason we grade diamonds.
And most of the people on this board know no one can tell the difference between a 1ct F VS2 and a D Flawless diamond with their naked eye. The fact one cost well over double as much!
In this chart I just finished researching one can see that available with wholesalers all around the world there are 215 four carat diamonds. Given there are 10 Grade categories, that means there are about 21 of each individual color and clarity. For about 170 nations to fight over.
Diamonds are rare. Synthetics are not and with the current rate of technological improvement and plummeting wholesale prices we will see the ludicrous retail markups fall and studded belts in TJMax

The GIA is doing this because they are taking a financial hiding from the IGI.
But who cares?

 

[Garry H (Cut Nut)]

Found on the Internet so it must be true:
"The six categories used to describe the quality of cubic zirconia are: AAAAA (the highest quality), AAAA, AAA, AA, A and AB (the lowest quality). The highest quality stones are hard and clear, while the lowest quality stones are cloudy and soft."

 

[MissGotRocks]

I did the numbers on leading natural and lab B2B platforms a few hours ago.
64% of lab diamonds are DE and Flawless to VS1. Up from 50% +F +VS1 a year ago.
Only 16.3% of Natural diamonds are of that extremely high quality.

It is the perfection that is the downfall. Perfect like CZs.

 

[jeaniefish]

It makes sense. Making lab diamonds super affordable while at the same time, repeating to customers that they are dropping in value and no trade-in’s are allowed —why would anyone even want to pay or need a certificate? What would be the value?
And not to sound elitist but also, is the target market for labs as concerned with the 4 C’s? Or just the 5th C—cost.

I am part of that “target market” I have to say that cut is still king, just as it is for earth mined diamonds. Granted, not every lab diamond purchaser does the research that I do , or even knows about PS, but that is true of most diamond buyers,regardless of where the stone was produced.

 

[Matata]

And second my interest in this whole phenomenon is social psychological, not economic, so for me I am very interested in how the symbolic and cultural meaning of diamonds shifts over time. It’s very hard for me to imagine that synthetic diamonds will simply eliminate the long history of cultural and symbolic meaning of diamonds as a luxury symbol. Rather, I can see the allure of lab diamonds fading when they are available at every TJ Maxx. For much the same reason that CZ never took off as a true replacement for diamonds in all but a narrow area of the market. Because sure, diamonds are about beauty, but they all also a symbol of class and wealth, and cheap mass produced goods don’t have that symbolism. If this analysis is correct, then GIA may be ahead of the curve in staking its territory in the luxury domain. Anyway, I am looking forward to seeing how it all plays out. Maybe natural diamonds will indeed go the way of spices as a status symbol of the past. But I doubt it.

^a gazillion likes.
Eventually the pendulum will swing the other way. LGDs will fall out of favor with some for the same reasons they are currently in favor -- cost will make them less appealing because everyone can afford one and then being made by nature rather than artificially by a machine will restore the mystique and status of mined diamonds and damn the environment. Imagine for example a gathering where 3 women are sporting 4 carat E IF LGDs that cost (for exaggeration purposes) $39.95 and the 4th woman has an earth grown that cost $XX,XXX,XXX. One diamond took millions of years to form in a natural process, is rare for it's size and color and the other 3 were made from stuff plunked down on a plate, pressured into existence in about 2 weeks (depending on method), and can be easily reproduced and replaced. There's a whole lot of cultural, symbolic, emotional, and psychological meaning to wade through that might be taken for granted by people in the industry who should pay attention when playing the long game.

 

[Chelsea Palmer]

I confess that seeing this development -- and it was not on this site but maybe on the GIA IG account -- made me smile a little. I think the lab grades mattered when labs were new and the various technologies were new and folks needed some leveling of the playing field. "Are they as good as they are supposed to be?!" But now that labs are dominating and they are (almost) uniformly colorless and clean, the need no longer exists.

To me, and I will raise some blood pressures here, it's like rating and ranking fake Rolexes. You can make an infinite number and they may get close to being indistinguishable from a real Rolex and you can grade them but so what? One could eventually make a "chemically identical" fake Rolex with real gold and all the right metals and parts.

Is GIA shooting themselves in the foot? Maybe. Go on Reddit and you will see just thousands of posts about "Who is still dumb enough to buy mined diamonds?" Among the most-often cited reasons for going lab is their ethical nature. What marketing genius! Energy-wise, they are about as ethical as crypto-mining, right? And there are plenty of ethically mined diamonds, and no one seems to care much about colored-gem provenance. Plus, labs are sold side-by-side with their "blood" brethren, and often by the same vendors. So, ethically, it's like "Ew, Tesla...but sign me up for Starlink!"

Maybe the next prestige wave will be small, perfect 1-ct mined diamonds that virtue-signal quality and not quantity. This is the Kashmir sapphire and Burma ruby model. It works for colored gems because you can then surround them with a monster diamond halo and thereby scream that there is something really amazing in the center! So maybe a natural diamond surrounded by a halo of...I don't know, lab diamonds?

A fake Rolex is not a Rolex. Diamonds, whether earth-extracted or created in a laboratory, are diamonds. There is no such thing as a “fake” diamond. Regardless of the source, a diamond is a diamond.

 

[Chelsea Palmer]

I confess that seeing this development -- and it was not on this site but maybe on the GIA IG account -- made me smile a little. I think the lab grades mattered when labs were new and the various technologies were new and folks needed some leveling of the playing field. "Are they as good as they are supposed to be?!" But now that labs are dominating and they are (almost) uniformly colorless and clean, the need no longer exists.

To me, and I will raise some blood pressures here, it's like rating and ranking fake Rolexes. You can make an infinite number and they may get close to being indistinguishable from a real Rolex and you can grade them but so what? One could eventually make a "chemically identical" fake Rolex with real gold and all the right metals and parts.

Is GIA shooting themselves in the foot? Maybe. Go on Reddit and you will see just thousands of posts about "Who is still dumb enough to buy mined diamonds?" Among the most-often cited reasons for going lab is their ethical nature. What marketing genius! Energy-wise, they are about as ethical as crypto-mining, right? And there are plenty of ethically mined diamonds, and no one seems to care much about colored-gem provenance. Plus, labs are sold side-by-side with their "blood" brethren, and often by the same vendors. So, ethically, it's like "Ew, Tesla...but sign me up for Starlink!"

Maybe the next prestige wave will be small, perfect 1-ct mined diamonds that virtue-signal quality and not quantity. This is the Kashmir sapphire and Burma ruby model. It works for colored gems because you can then surround them with a monster diamond halo and thereby scream that there is something really amazing in the center! So maybe a natural diamond surrounded by a halo of...I don't know, lab diamonds?

And then the wearer of this 1-carat mined haloed diamond has to advise everyone it’s a natural stone. Although likely everybody would assume it’s natural, seeing as it would only be one carat. So maybe in the way that everybody assumes diamonds larger than, say, 3 carats are lab-created, now we will all assume that diamonds that are one carat and under are mined diamonds, I suppose.

 

[Chelsea Palmer]

^a gazillion likes.
Eventually the pendulum will swing the other way. LGDs will fall out of favor with some for the same reasons they are currently in favor -- cost will make them less appealing because everyone can afford one and then being made by nature rather than artificially by a machine will restore the mystique and status of mined diamonds and damn the environment. Imagine for example a gathering where 3 women are sporting 4 carat E IF LGDs that cost (for exaggeration purposes) $39.95 and the 4th woman has an earth grown that cost $XX,XXX,XXX. One diamond took millions of years to form in a natural process, is rare for it's size and color and the other 3 were made from stuff plunked down on a plate, pressured into existence in about 2 weeks (depending on method), and can be easily reproduced and replaced. There's a whole lot of cultural, symbolic, emotional, and psychological meaning to wade through that might be taken for granted by people in the industry who should pay attention when playing the long game.

I can see that being the case for someone who already HAD a mined 4-carat E IF, but if someone were in the market for one today, is the thought that the “prestige and allure” of a mined diamond is so important to some folks that they would, in fact, shell out $XX,XXX,XXX for a diamond, instead of $39.95 for a diamond? I’m not asking this rhetorically. I’m genuinely interested in folks’ opinions. And then, again not asking rhetorically, this fourth woman would have a sense of satisfaction in knowing that her diamond cost an astronomical sum of money, correct? There’s satisfaction in that? Or is the satisfaction solely in the fact that the diamond was extracted from the Earth, and the astronomical cost is, no pun intended, the price she would pay to have a diamond that’s millions/billions of years old?

 

[Chelsea Palmer]

I am part of that “target market” I have to say that cut is still king, just as it is for earth mined diamonds. Granted, not every lab diamond purchaser does the research that I do , or even knows about PS, but that is true of most diamond buyers,regardless of where the stone was produced.

I recently purchased a lab-grown diamond, and I was extremely concerned about the four Cs, as well as the 5th C: cost. That’s how, with the invaluable help of DejaWiz, I ended up with my stunning (and reasonably-priced) 2-carat LGD. I think many of us are concerned with quality. But from what I’ve seen, there are a lot of folks that buy massive-sized LGDs that, with all due respect, I suspect are more concerned with quantity and less concerned with quality. But that’s also the case for mined diamonds. 20 years ago, one of my best friends told her boyfriend she wanted a 2 carat diamond. The budget was $10,000. She got her 2-carat diamond, but it has no sparkle, no fire, and a rather cloudy appearance. So she, too, valued quantity over quality.