Diamond prices plummet! "The buyback price for 8000 yuan is only 600 yuan."

According to CCTV Finance, diamonds have been the darling of the luxury goods market for the past few decades, while the price of certified diamonds has dropped by 35% to 40% in the past year.

The diamond market is cooling down, while the gold market is getting hotter.

Netizen Xiao Tang told reporters, "I would rather buy gold." Xiao Tang said, "Diamonds have been worthless since I got them, so buying a diamond ring for a wedding is enough." Xiao Tang said that buying a diamond ring is just to satisfy the sense of ceremony during the wedding, and he doesn't wear it for much time after marriage. "The security provided by gold is incomparable to diamonds."

Has the myth of exorbitant prices fallen into desolation?

According to CCTV Finance on the 20th, Antwerp, Belgium is known as the "Capital of Diamonds in Europe". There is a globally renowned diamond street with four diamond exchanges and thousands of diamond wholesalers gathered here. Every year, a large number of diamond transactions are completed here. Kevin is a diamond wholesaler from India.

Indian diamond wholesaler Kevin: Over the past year, certified diamond prices have fallen by 35% to 40%. Among them, diamonds ranging from 50 to 3 carats were the most severely impacted, and sales decreased by 30% to 35% during the same period.

In addition, the price of natural diamonds has also been impacted by artificial diamonds. A high-end diamond brand store owner told reporters that unlike in the past, more than half of customers will choose artificial diamonds recently.

In the past year, due to the sharp increase in living costs and consumption downgrades, people in many European countries are no longer picky about the grade of diamond rings, and artificial diamonds are quickly seizing market share in the natural diamond market.

Fleischteg, Director of the Belgian Diamond Exchange Federation: Two years ago, artificial diamonds were 40% cheaper than natural diamonds. Later, they were 60% cheaper. This year, they are 70%, 80%, and even 99% cheaper. Perhaps in the future, when you buy soap at the supermarket, you will also receive a diamond as a gift.

According to data compiled by global jewelry industry analysis firm Tenoris, the market share of synthetic diamonds has been continuously increasing since 2021. In July of this year, the market share has reached 49.9%, very close to the critical point of 50%, and it is expected to further increase in the future.

Since the beginning of this year, there has been a significant drop in the price of natural diamonds, prompting people to wonder if the "sky high price myth" of diamonds is gradually coming to an end?

According to the Global Natural Diamond Price Index compiled by independent diamond analyst Ginniski, prices have fallen by 13.6% so far this year, while retreating by 24.6% from historical highs.

In addition, due to De Beers monopolizing the natural diamond industry chain, the weak demand for natural diamonds can also be felt through its performance. In August, De Beers sold $370 million in natural diamonds in its seventh sales cycle of the year, a year-on-year decrease of 42% and a month on month decrease of 10%. This is also the fourth consecutive month of sales decline for the company.

Over the past year, De Beers has lowered the price of its mainstream product, natural diamonds ranging from 2 to 4 carats, by 40%, and industry insiders say there is still room for natural diamonds to fall. In the worst-case scenario, prices will fall by another 20% to 25% in the next year.

Russian diamond giant suspends diamond sales

According to media reports on September 20th, Alrosa stated in a memo sent to clients that the company will suspend original diamond sales in September and October. Alrosa stated that she believes this move will address the supply-demand mismatch that has occurred in recent months.

Alrosa is one of the world's largest diamond giants, supplying about one-third of the world's diamonds, comparable to De Beers, which had been in a monopoly until the beginning of this century.

Data shows that the International Diamond Exchange Diamond Price Index reached a historical peak of 158 in March 2022, and has since fallen to around 110, reaching a new low in nearly five years, with a decline of about 30%. Industry insiders say that the sustained high inflation in many countries around the world is an important reason for this phenomenon.

Earlier this month, the Indian Diamond Association called on miners to restrict supply. About 90% of diamonds in the world are cut, polished, or traded by the Indian Diamond Association.

Not retaining value

A netizen: Buying diamonds means paying IQ tax

In addition to the impact of artificial diamonds, the non preservation of natural diamonds is also an important reason for their continuous price decline.

Many users have expressed on social media that their high priced diamond rings have experienced a "big drop" in price during recycling:

The recycling price of a diamond ring purchased for 8000 yuan is only 600 yuan, and a diamond ring worth 30000 yuan is only worth 2000 yuan after 5 years

Some even claim that the most valuable diamond ring they bought for 10000 yuan is the 18k gold ring holder.

Second hand diamond rings are bought high and sold low, which has led many netizens to exclaim that "buying diamonds means paying an IQ tax.".

In response to the issue of low recycling prices in the second-hand diamond ring market, the reporter contacted a jewelry recycling store located in Henan. The jewelry appraiser at the store said, "When buying a diamond ring, it is expensive because the merchant's advertisement is well placed. After all, buying a diamond ring represents a different meaning, and the brand surcharge is high. Nowadays, diamonds are not a scarce product, but a price that has been hyped up by the market. When purchasing, they are all at a fixed price. If diamond recycling enters the secondary market, the price can only be based on their condition."

In addition, according to a report from the Securities Times, a reporter recently conducted random interviews with several young consumers in Shuibei, Shenzhen who were choosing gold jewelry. When asked why they chose gold jewelry instead of diamond jewelry, the most common response was that gold is more "valuable", and there are also factors such as easy monetization of gold jewelry and opaque prices of diamond jewelry.

The reporter saw at the scene that a 0.5 carat 18K gold white diamond women's ring priced at around 57000 yuan is only 25% off the actual price. Moreover, the reporter visited multiple stores and found that the prices and discount ranges vary among different stores.

Some shops on site also indicated that the recycling price of natural diamonds will be discounted. On the other hand, many gold jewelry stores indicate that the gold jewelry recycling price is 460 yuan, which is the same day's purchase price minus 10 yuan, and can also be "discounted" on-site.

Is gold still worth buying despite its skyrocketing price?

Recently, the price of gold has continued to rise. What is the future trend of gold prices? How should consumers layout their investments? In the view of Zhang Bo, Investment Director and National Registered Senior Gold Analyst of Guangdong Yuebao Gold Group, as the Double Festival approaches, strong short-term demand will continue to raise the price of gold. Investing in gold can be done in batches after the price drops after the holiday. You can purchase physical gold bars, investment gold bars, gold and silver commemorative coins and other varieties that meet national standards through banks and gold shops.

Ai Xiaojun, ETF fund manager of Cathay Pacific Gold Fund, analyzed that in the long run, the overall trend of global economic recession, the increasing demand for central banks to purchase gold, and the global trend of "de dollarization" make gold expected to become a new round of pricing anchor. These three factors make gold have the ability to move forward, and if there is a pullback, one can consider buying on dips. In terms of domestic gold prices, the long-term significant premium is unsustainable. Once the depreciation factor of the RMB against the US dollar is eliminated, it will effectively digest the significant premium of domestic gold prices.

Song Jiangzhen, Investment Director of Guangdong Yuebao Gold Group and National Registered Senior Gold Analyst, also stated that the overall demand for gold has continued to grow since the beginning of this year, providing solid support for the rise in gold prices. In addition, with the Federal Reserve's interest rate hike nearing its end, the biggest obstacle to gold prices has been eliminated, and the future trend of gold prices may be beyond imagination. He emphasized that when consumers invest in gold, in addition to paying attention to the price of gold, it is important to allocate and consume rationally based on their own abilities.

At the same time, Zhu Zhigang, Vice President and Chief Gold Analyst of Guangdong Gold Association, also suggested that "investors should first choose the variety when investing in gold, and should mainly invest in gold bars and coins. Secondly, investors should adopt a small quantity and batch strategy during the purchasing process, and also choose relatively safe prices to buy.".