I don't see demand for natural diamonds going anywhere. There's a reason that Rolex, Cartier, and other luxury brands don't use cheap, synthetic diamonds in their products.

I know a jeweler personally that sells synthetic and natural diamonds. He can spot the difference from a mile away between a synthetic and a natural diamond (synthetics look extremely pure and have no flaws). His wealthy clients buy natural diamonds. Not because it's a "better investment" but because they can.

If you can buy a knockoff Louis Vuitton for 5% of the cost of the real one, great, go for it! Most people won't be able to tell the difference (I certainly can't). But the market for authentic Louis Vuitton isn't going anywhere, and the people that can afford it will buy the real ones, and the people that can't will buy the fake ones.

As long as there's a distinction between natural and synthetic, synthetic diamonds will drop to a dollar a carat while naturals only become more of a status symbol.

EDIT: changed real to natural when referring to diamonds