What's behind the fall of diamond prices to record lows

Diamonds have lost much of their shine in recent years.

Natural diamonds have lost more than half of their value over the past five years. On average, a 1-carat stone now goes for $3,898, or 51% less than its average price of $8,007 in 2021, data from diamond trading platform Rapaport Group shows. The Diamond Standard Index, which tracks prices of so-called investment-grade diamonds, hit 2,490 in early August — its lowest level ever. This week, it was hovering just north of 2,500.

Several drivers are conspiring against diamonds, including a glut of mined stones that has hit the market over the past few years. And while attempts to clear out that oversupply are underway, another trend is compounding the issue: a rise in lab-grown diamonds.