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In 1960, the average price for such a diamond stood at some U.S. dollars. Since then, the diamond price has increased more than tenfold, to * U.S. dollars in 2015.

Diamond prices: carats to dollars

Diamonds are a carbon-based gemstone coveted by innumerable people worldwide. They are among the hardest materials on Earth (if not the hardest), which makes them very valuable for industrial uses in addition to their wide use in luxury jewelry. Diamonds are also expensive. The cut, clarity, color, and carat (weight and size) are the so-called four 'Cs' that dictate a diamond's price. One carat is equal to a weight of approximately *** milligrams, and cost approximately * U.S. dollars in 2015. Diamond prices per carat show a consistent increasing trend, while the annual rough diamond production worldwide has sat between *** million carats and *** million carats between 2009 and 2019.

Impact of the diamond demand-supply gap on prices

As the known global diamond reserves continue to be mined and depleted while the global demand for diamonds increases, a diamond demand-supply gap is expected to develop in the coming years. By 2050, there is a forecasted supply shortfall of some *** million carats of diamonds worldwide. This will likely cause the price per carat to continue increasing for natural diamonds. The production of synthetic diamonds, also referred to as lab grown diamonds, is a potential solution to the projected diamond shortfall. There was a steady production of between **** and **** billion carats of synthetic diamonds worldwide between 2007 and 2016. Synthetic diamonds also cost between ** and ** percent less than a natural diamond does, but not every consumer is willing to forgo natural diamonds in favor of a diamond that has been created in a lab.