Natural Diamonds vs Lab-Grown Diamonds: A Complete Investment Comparison

Funding Souq Editorial Team

Tech Writer

Nov 17, 2025

Funding Souq’s editorial team comprises experienced finance and investment professionals that are on a mission to fuel SME growth, create jobs, and drive the economy forward. They aim to share their extensive experience and industry know-how to empower entrepreneurs and investors alike.

Nov 17, 2025

Table of Contents

Diamonds are the ultimate symbol of wealth. But in recent years, people are also eyeing them as investment pieces.

This comes as part of a global trend in commodity buying, a symptom of markets being in flux and investors looking to hedge inflation with tangible commodities So why not diversify your portfolio with a girl’s best friend?

The global market for diamonds is worth about $110 billion. And some analysts see that growing to $140 billion by 2029.

A key question surrounding the precious gem is whether to stick to natural, mined diamonds or pursue lab-grown gems, a growing trend amid ever-present concerns over ethical sourcing. Each option comes with benefits and drawbacks. In this post, we’ll break down what makes sense from an investment strategy perspective.

What are natural diamonds?

Diamonds of the natural variant are those rare, sparkling gemstones that have been ever-so-slowly crystallizing deep underground, where they’re subjected to intense pressure for hundreds of millions, or even billions, of years.

Owing to this mind-numbingly long process, every stone takes on a unique color and clarity, features that often add significantly to their value.

Because they take eons to emerge, diamonds are inherently scarce. This scarcity along with the so-called “Four Cs” – carat, cut, color, and clarity - tends to determine their price (more on that below).

What are lab-grown diamonds?

WIth lab-grown diamonds, scientists have been able to mimic the intense natural conditions that produce diamonds underground, enabling them to create synthetic versions of the gemstones from pure carbon that are nearly identical.

The first ones were produced by General Electric in the 1950s. Today’s lab-grown diamonds feel just as hard, sparkle just as beautifully, and even down to a chemical level, appear nearly identical to the ones formed miles under the earth’s crust.

Lab-grown diamonds cost less and are ethically sourced. But unlike rare earth diamonds, the man-made ones can be made in just a few weeks, so they’re abundant in supply.

And as they get better and easier to make, there’s much debate over to what extent synthetic diamonds can be sold back later (since consumers can just buy new ones with relative ease). That raises thorny questions about whether they can be a store of value in the future.

Long-term appreciation: do diamonds really grow in value?

Whether a diamond will grow in value comes down to how rare and high-quality it is. Stones bought as jewelry items, like an engagement ring, will often re-sell below its sale price.

That’s because prices are marked up by jewelers due to branding, overhead, and marketing. So if you’re thinking of diamonds as a long-term value play, you want to think about rare, investment-grade stones. It’s also not a liquid market, meaning it could take time to find a buyer.

Lab-grown diamonds have even worse prospects when it comes to growing in value, as they appear to be trending downward in terms of resale price, a result of the technology around their production improving.

Is investing in diamonds safer than gold or silver?

A key advantage to diamonds is that, because of their high price, large amounts of value can be stored in a tiny stone. In that sense, they’re efficient. Financial experts often cite diamonds as a complementary store of value, something to buy along with other precious metals like gold and silver, though not necessarily a replacement for them.

Unlike gold or silver, diamonds don’t have a daily market for trading or standardized global pricing. Every stone is unique, and so is its pricing. That makes them far less liquid. In short, gold and silver are probably safer options, but diamonds can add some diversity.

How does the diamond grading (4Cs) impact investment returns?

As noted, diamonds are graded and priced based on the “Four Cs”. Here’s how that breaks down:

1- Carat: This refers to a diamond’s weight. Bigger stones are more rare. They tend to appreciate more.Their prices are also more volatile.

2- Cut: This refers to how well a diamond reflects light. A very strong cut will make even a smaller stone radiate brilliantly, which can increase its resale value.

3- Color: This actually refers to how colorless the gem is. Pure white or D-color diamonds are the highest-grade ones. They are fully colorless (no yellow or brown tint) and the most rare. Sometimes they’re called “icy white”.

4-Clarity: This refers to how few blemishes or flaws can be seen in the diamond when put under 10x magnification. The more flawless, the higher the value.

At A Glance: Natural Vs. Lab-Grown Diamonds

In the table below, you’ll find a quick snapshot of how natural diamonds stack up against lab-grown diamonds, from an investment perspective.

Feature	Natural Diamonds	Lab-Grown Diamonds
Origin	Formed deep underground over millions, if not billions, of years	Manufactured within weeks via high-pressure, high-temperature technology or chemical methods.
Rarity	Extremely rare, especially gem-quality ones. As quality and size increase, they become even rarer	Abundant. Can be produced in large qualities with relative ease.
Price	More expensive due to scarcity	Some estimates put them at 80-95% cheaper.
Resale Value	Expected to hold value better, though prices vary by quality.	Lower resale value and prices have been declining as technology improves.
Investment Potential	High-quality stones are considered a long-term store of value and can appreciate.	Limited investment potential owing to future price uncertainty.
Liquidity	Depends on quality and certification. Can be difficult to sell quickly.	Weak secondary market demands and low liquidity.
Certification	Certified by independent, prominent labs like GIA, IGI, and AGS.	Also certified by GIA and IGI but focus is on quality, not rarity.
Market Perception	Seen as luxury item associated with prestige, rarity, long-term value	Seen as sustainable, ethical, but less prestigious and not rare.
Best For	Long-term investors and collectors, a different diversity play	Buyers wanting a sentimental purchase, a beautiful item that’s ethical and lower cost.

Disclamer:
This post is for educational purposes only, and does not constitute investment advice or a solicitation to take any financial action. It should not be relied upon when making investment or financing decisions.