I've heard quite often that the only reason diamonds have the high value they have is because the price is set by a single worldwide diamond mining monopoly. That, if actual quantity versus demand is taken into account, diamonds are intrinsically worthless -- and therefore have quite little resale value.
How much of this is true? And who actually runs/owns this supposed monopoly? Is this likely to affect diamond prices if I am interested in purchasing?
Yes, the De Beers Group of Companies is a diamond cartel that had complete control of the diamond market for most of the 20th century. They still control a sizable portion of the market and their effort at marketing (particularly with the slogan "A Diamond is Forever") has done much to inflate the market for diamonds in our society.
The intrinsic value of diamonds is much lower than the market prices currently reflect, but with the caveat that there is a rarity factor which does drive up the price of larger diamonds.
The larger the diamond, the more likely it is to have flaws, so when it comes to diamonds that are 5 carats or greater, you are not as likely to see a new supply of diamonds disrupt the prices of those larger stones.
Some other ways that high end jewelers and suppliers are differentiating themselves is by patenting a specific cut that they design. This is another barrier to entry that works to create some artificial price inflation. One common example is the Lucida cut sometimes referred to as the Tiffany cut.
Diamonds can also be manufactured. The same carbon structure can be grown in a lab. These stones have the same carbon structure as natural diamonds but without the flaws and visible impurities. Most manufactured diamonds are used industrially, but processes have improved sufficiently to allow for gemstone quality synthetic diamonds. They sell at a decent discount, so that might be an option to consider if you want a substitute. In the years to come, you can expect prices for synthetic diamonds to continue to decrease which will probably put some further downward pressure on jewelers' prices.
diamonds are intrinsically worthless -- and therefore have quite little resale value
It may be true that De Beers has a near monopoly on diamond supply, but they are still a scarce resource, so their supply is still very limited. They do have resale value - that's one reason why diamond jewelry is stolen so often. There's just not a huge secondary market for diamonds that I know of (unlike cars, for example). You can sell diamond jewelry at pawn shops or online brokers, but you probably only get a fraction of their retail value.
They are not intrinsically worthless. They do have value in the industrial sector as powerful cutters, although synthetic diamonds are much more prevalent in this market. Their value in industry is much lower than their worth as jewelry.
Think about gold - it does not have a monopolic supplier but it still has a relatively very high value.
De Beers is the company most cited as the near monopoly. They used to own a massive chunk of the diamond supply and intentionally restricted that supply to increase the price. In recent decades, new sources of diamonds have reduced the De Beers' singular grip. They still have a large share though.
Video about this from Adam Ruins Everything: https://www.youtube.com/watch?v=N5kWu1ifBGU
it turns out this ancient tradition [of giving diamonds rings for engagements] was invented less than a century ago by the De Beers Diamond Corporation... in 1938, the De Beers Diamond cartel launched a massive ad campaign, claiming that the only way for a real man to show his love is with an expensive hunk of crystallized carbon, and we bought that shit.
It continues
The only reason diamonds are even expensive is that De Beers has a global monopoly on diamond mining and they artificially restrict the supply, to jack the prices up.
Because of this artificial supply restriction, the resale value of diamonds are quite low.
