What will happen to jewelry prices? Does this mean we can make perfect aluminum jewelry that looks like gold (except for weight and such)? Would people care if they could get real gold or fake aluminum that looks identical and is muuuuch cheaper?
Yes.
Neither diamonds or gold are really that desirable for jewelry. Gold is a metal that doesn't hold its shape very easily and good diamonds come in one color: colorless. The desirable part comes from the fact that they're rare. Rare things are fashionable.
There's been ways to produce artificial diamonds for some time now. Some of them actually have some really awesome properties when it comes to ultraviolet light. They actually glow and it's downright beautiful. A "genuine" diamond doesn't, since the ones actually created in the earth have to work out impurities the hard way and aren't as pure as at least one of the artificial processes.
Yet the popularity of natural diamonds continues. Frankly some of the other precious gemstones look nicer for many pieces, it's the rarity and implication of wealth that causes people to care about diamonds.