Good data exists to test your assumption, which I think is partially correct. http://www.idexonline.com/diamond_prices_index http://www.idexonline.com/diamond_

Good data exists to test your assumption, which I think is partially correct. http://www.idexonline.com/diamond_prices_index http://www.idexonline.com/diamond_prices_index The Diamond price index shows prices HAVE come down in the past 5 years by approximately 10%. Fake diamonds may be depressing the price of real ones, but it doesn't look like the market is flooded enough to solve problems like Conflict Diamonds right now. This is probably mostly because the price of lab grown synthetic diamonds is still in the same range as real diamonds for most large stones and engagement rings. As the price of artificial diamonds continues to decline this effect should continue to grow.