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?

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    I think this question narrowly falls into the on-topic zone of personal finance related economic questions. The implicit question here is whether the value of diamonds could plummet in the future to affect buying decisions today. It's not an academic discussion if you are considering buying diamonds. May 17, 2017 at 13:50
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    Value is singular, not plural. Reverting the title change.
    – Weckar E.
    May 17, 2017 at 18:31
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    They aren't worthless per se, just worth much less than the market value.
    – PyRulez
    May 17, 2017 at 18:54
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    Natural diamonds are pretty rare, especially the flawless ones, so they are intrinsically definitely not worthless, though price manipulation could certainly inflate it.
    – RomanSt
    May 17, 2017 at 23:12
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    @GaneshSittampalam migration sucks. people like to bash questions for very crappy reasons whatsoever. The ontopicness of the question might even be borderline in here, but NathanL nailed it. Question value is measured by the quality of the answers it entails, and the community has already voted on this one.
    – Mindwin
    May 19, 2017 at 23:59

3 Answers 3


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.

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    Interesting fact about man-made diamonds. So they are cheaper and better than natural ones? What prevents their price from rising? You can't tell them apart with the naked eye, can you?
    – xiaomy
    May 17, 2017 at 14:27
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    @xiaomy I think it's safe to say the average person cannot tell the difference with the naked eye if there is no reference to compare, but when you look at a 3 carat synthetic diamond next to a 3 carat natural diamond side by side, you might be able to spot the synthetic one with the naked eye. May 17, 2017 at 14:39
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    @xiaomy the real answer is marketing. A synthetic diamond is chemically equal to a natural diamond, has less flaws, but is not a natural diamond, therefore the very monopoly that inflates the value of their stones push down the price of the synthetic ones.
    – Mindwin
    May 17, 2017 at 16:25
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    @xiaomy Have you ever tried to sell a diamond? - The Atlantic 1982
    – Mindwin
    May 17, 2017 at 17:15
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    I'd disagree there, what happens when OPEC cuts production? Other producers ramp up production. Prices come back down, and OPEC has even less short-term influence than it had previously. When talking about controlling a market and inflating prices, short-term is almost meaningless. DeBeers had great control of prices when they controlled 90% of the market, but currently the market is mostly controlling prices.
    – Hart CO
    May 17, 2017 at 21:11

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.

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    The high resale value can easily be explained for the same reason they are so expensive to begin with. If you just bought a diamond for $1000, your not going to sell it for $20 because that's its actual value (as an example price here), especially if most people believe its worth $1000. Its value as jewelry is arbitrary. Outside of industrial uses, its just a hard (scientific definition) and pretty rock. Unlike Carbon, Gold is truly scarce, and we cant make gold (for a profit anyway), but we can compress carbon into those synthetic diamonds
    – Ryan
    May 17, 2017 at 15:57
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    @ryan what? Reselling a diamond is a exercise in frustration management for a private individual.
    – Mindwin
    May 17, 2017 at 16:37
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    @Ryan: OTOH, if you have a diamond that you paid $1000 for, and desperately need money so you'll take the best price you can get, that price is not likely to be more than $100 or so. This is unlike gold, where the purchase & selling prices of a gold coin on any given day are going to differ by only a small amount.
    – jamesqf
    May 17, 2017 at 16:54
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    @Ryan: There seems to be plenty of real-world experience that says that's not so.
    – jamesqf
    May 18, 2017 at 3:53
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    "It may be true that De Beers has a near monopoly on diamond supply" You mean had. At the moment, according to Wikipedia, they currently only control about a third of the world market. May 18, 2017 at 21:23

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.

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    How does supply restriction make the resale value low?
    – Hart CO
    May 17, 2017 at 14:51
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    "And we bought it" - and eighty years later, we're still pawns to advertising...
    – corsiKa
    May 17, 2017 at 15:28
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    @corsiKa the second (best and effective) marketing campaign in the world. The first place goes to the Coca-Cola Santa.
    – Mindwin
    May 17, 2017 at 16:33
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    @Mindwin The first place goes to carrots, courtesy of the RAF during WWII.
    – Brian
    May 17, 2017 at 16:38
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    @HartCO The "new Diamond" market is supply constrained and heavily advertised. Because diamonds don't break and many millions of people get diamonds a year and die, the "used Diamond" market is large and does not have a singular entity manipulating supply. I'd personally say a used diamond is fungible with a new diamond but the general populace disagrees with me.
    – Lan
    May 17, 2017 at 16:51

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