At a time when global diamond prices are witnessing a relative decline and new variables—most notably lab-grown diamonds—are reshaping the market, an old recurring question is once again taking center stage: When should I buy diamonds to make a profit?
A seemingly simple question, yet one that—according to market experts—cannot be answered using the same logic applied to gold, nor by the rules of short-term investment. Diamonds operate in a fundamentally different market, with their own pricing mechanisms and purchasing philosophy.
This is emphasized by Hussein El-Ghandour, a diamond market specialist, who explains that a diamond buyer is fundamentally different from a gold buyer, whether in motivation, value retention strategy, or resale expectations. Gold is a transparently priced commodity that can be tracked moment by moment, while diamonds represent a selective, high-end market governed by multiple intertwined factors rather than a fixed daily price.
A Repeated Loss That Shapes Public Perception
El-Ghandour recounts a common story in the Egyptian market: a customer who purchased a diamond ring as part of a wedding set, only to attempt selling it two or three years later and discover a loss approaching 60% of its original value.
Such experiences are far from rare and have significantly contributed to the widespread belief that diamonds are a losing investment.
However, El-Ghandour stresses that these losses do not reflect the true nature of diamonds as much as they expose misunderstandings related to purchasing methods, points of sale, and post-sale policies—especially amid the global decline in natural diamond prices over the past three years according to the Rapaport Index, alongside the rapid rise of lab-grown diamonds.
Diamonds Are Not Gold
According to El-Ghandour, comparing diamonds to gold from an investment perspective is fundamentally flawed. Gold is easily accumulated and stored, and its owner feels an immediate sense of value. Diamonds, on the other hand, are priced based on a specialized global benchmark—the monthly Rapaport Report—which reflects supply and demand averages, color, clarity, and stone availability.
While consumers are not expected to master pricing tables, anyone seeking to preserve value must understand the basic principles governing the diamond market.
The Large Stone Rule
One of the most critical points El-Ghandour emphasizes is that a diamond’s value lies in the stone itself, not in the number of stones within a piece. Jewelry set with numerous small stones carries high craftsmanship costs that vanish entirely upon resale. By contrast, pieces built around a single prominent stone—such as a solitaire of half a carat or more—retain value more effectively, as their pricing aligns with international benchmarks.
Although many Egyptian consumers traditionally favor heavily set designs, a growing segment of informed buyers is shifting toward larger, singular stones for better value retention.
Store Policy Makes the Difference
El-Ghandour underscores that pricing alone does not determine the diamond experience; credibility and post-sale policies are decisive. Reputable companies offer clear upgrade and exchange policies, allowing customers to trade in their diamonds after several years. Cash buybacks typically involve a deduction of 10% to 15%.
In many cases, rising gold prices compensate for this deduction, preventing real losses. El-Ghandour notes that retaining a diamond client is more valuable than closing a single transaction, as trust is the cornerstone of this market.
Where Losses Truly Begin
Losses occur primarily when diamonds are purchased from unreliable sellers, intermediaries without documented policies, or when clients attempt resale outside the original point of purchase. In such cases, jewelry is dismantled, gold is priced separately, and diamonds—especially small stones—are often undervalued or disregarded entirely.
The Four Cs: A Non-Negotiable Framework
Diamond pricing is governed by four universally recognized factors: carat weight, color, clarity, and cut. Weight determines rarity, color ranges from colorless to yellowish tones, clarity reflects natural inclusions, and cut remains the most critical factor influencing brilliance—despite not being directly reflected in Rapaport pricing.
El-Ghandour explains that the modern round brilliant cut is based on precise geometric principles developed by Marcel Tolkowsky, ensuring an optimal balance between white brilliance and fire.
Lab-Grown Diamonds: A New Reality
The discussion also addresses lab-grown diamonds, which have become a significant challenge to the traditional market. Advanced production techniques now allow the creation of diamonds chemically identical to natural stones within days, leading to a dramatic price collapse and substantial losses for early buyers.
El-Ghandour warns of the dangers of mixing natural and lab-grown diamonds in the market, stressing that transparency and full disclosure are now legal and ethical necessities to protect consumers.
El-Ghandour concludes by stating that diamonds do not inherently lose value; rather, losses occur when they are purchased without knowledge, from unreliable sources, or using a gold-investment mindset that does not suit their nature. Understanding the product, choosing a credible seller, and ensuring clear post-sale policies are the decisive factors separating lasting value from disappointment.
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