All around the world, investors are waking up to the potential of rare coloured diamonds.But it’s not just investors who are picking up diamonds…
The global jewellery industry continues to offer its strong support.In the Middle East and Asia, the aesthetic value of diamonds is gaining popularity with a growing segment of upscale consumers. According to Dr. K. Merchant, CEO of PureGold Jewellers, the growth rate of diamond sales has outpaced that of gold jewellery.
Meanwhile, China and India continue to experience strong growth in diamond sales as investors turn away from paper assets and new dealers and jewellers expand their reach into major cities in these growing economies.
Back in the U.S., at Christie’s New York auction, demand is holding up extremely well. Recently, a large blue and pink stone sold for over $6 million. And overall, nearly $30 million worth of diamonds changed hands. High profile auctions like this serve as a barometer of stability in the market and illustrate the reliability of coloured diamonds as a store of value.
After the subprime disaster and with economic uncertainty, investors are looking for low-volatility investments. Diamonds are less volatile, as they're resistant to speculation by the financial community, so there are no derivatives or tradeable products and no short selling is possible.
"
Peter Laib, chairman of Diamond Asset Advisors
"
Over the past ten years - while the stock market has shimmied sideways - Gold has risen 213%. Silver too has gained 159%. But unbeknownst to most investors coloured diamonds have also held up well. Some have even tripled in value.
This trend is expected to persist as the economy continues to deteriorate.
-
WHY COLOURED DIAMONDS ARE SO RARE?
Here’s why coloured diamonds are rare. For every one million diamonds that are mined, only one will be found that is a quality one carat diamond. In order to find a two carat diamond, about five million diamonds must be mined. More than two hundred tons of ore must be mined to find one small diamond, and even then, more than 80% of the diamonds that are mined are only good for industrial use, such as diamond drill bits.