[thworp]

> the supply price of diamond stones has almost nothing to do with the cost of a diamond ring

Correct. But it does have something to do with the supply of *diamond rings*. Since there is a de-facto cartel between producers, middlemen and retail, it is not easy for new entrants to sell their rings to consumers. So no, there is not an oversupply of real diamond rings that would depress prices. Also, there is a sizeable % of people that want to spend more on a ring, which is quite rare in markets.

Also, I bet that there is a growing ecosystem of individuals and companies producing fake diamond jewellery and selling it direct to consumer (haven't looked into it).