The old familiar phrase goes “Diamonds are a girl’s best friend” but soon it maybe “Diamonds are an investors best friend”. Lately there have been several articles that have caught trader’s attention as gold seems to have lost its luster since touching the 1900 price a bit ago. Many speculators were hoping that bitcoin the new digital currency would serve as a new investment vehicle, but with global legal problems have scared off investors along with the difficulty of owning, trading or possessing their “digital” investments.read more
Both import and export of rough and polished diamonds grew significantly, with a growth rate of 8% for rough and 4% The total value of traded goods amounted to US$ 55 billion, which is very close to the record US$ 56.6 billion in 2011, making 2013 the second best year for Antwerp ever. The 2013 annual figures are in line with the trade analysis of the past decade, once again confirming Antwerp’s leadership as the world’s first and foremost diamond trading hub. According to CEO Ari Epstein production of rough diamonds has been decreasing for several years now. On the other hand, the percentage of rough diamonds passing through Antwerp increased to 84%. The total traded volume in Antwerp grew as well, from 207,1 billion carat in 2012 to 211,3 billion carat (or 42,3 tons of diamond) in 2013. In terms of polished diamonds there was a decrease: -3% for export, -0,7% for import. "Diamonds are getting bigger and more expensive. Clients invest more and more in high quality diamonds", Epstein says. He also considers this positive evolution as the result of an in 2012 launched marketing plan, which provides in tender facility, bringing together clients and sellers in Antwerp.read more
Analysts ensure that global production is not sufficient to meet the increased demand expected in the coming years. China has overtaken Japan in 2011 to become the second largest consumer of diamonds, behind the United States. The market there has doubled in five years.
This article that was published in De Tijd describes that India and China will account for half of the new diamond consumption in the world, and thus will make the global demand for diamonds increase in the future. In the past 15 years, there was no major discovery of kimberlite, the source of diamond, and it seems unlikely that this will change, therefore the supply is and will remain limited. It is not easy to invest in diamonds because determining the price is a subjective matter, but it is however possible and interesting to invest in this late-cyclical commodity thanks to the brilliant prospects in supply and demand of diamond.read more
Art investments, and particularly blue-chip paintings are considered as an interesting investment in the art market. However, as investors in general seek for more diversification of their assets, (diamond) jewellery is gaining more interest. Jewellery has the advantage of portability, which makes people can exercise more control over their capital and at the same time, they can enjoy their investment by just wearing the jewellery every day. The long view on this so called “refugee mentality” of investing in diamond jewellery is highly reassuring as the average asking price for a one-carat diamond among gem dealers is rising significantly and will continue to do so, according to diamond experts.
In this interview Matt Manson (Stornoway CEO) forecasts that in the coming years 15-20% of world diamond demand will be diamonds for investment purposes, due to different factors. The development of emerging countries’ middle class results into a higher demand for diamonds and the will to purchase “discretionary products” apart from necessities. This higher demand combined with limited supply due to natural resources being limited and poor extraction conditions will lead to an increase of diamond prices. Therefore, according to Manson, this is the right moment to invest in diamonds.read more
High gold prices and financial volatility are currently boosting investment in diamonds, because diamonds are a perfect addition to a diversified investment portfolio. Diamond prices rise above the inflation index. The soaring purchasing power in emerging markets and a deficit in supply will lead to the value increase of diamonds in the future.read more
This note examines the investment performance of diamonds and other gems (sapphires, rubies, and emeralds) over the period 1999–2010. Over our time frame, the annualized real USD returns for white and colored diamonds equaled 6.4% and 2.9%, respectively. Since 2003, the average returns have been 10.0%, 5.5%, and 6.8% for white diamonds, colored diamonds, and other gems, respectively. Both white and colored diamonds outperformed stocks between 1999 and 2010.read more
On top of the expected recovery in diamond demand from established consumers, demand for diamond jewellery is growing strongly in the emerging markets where the increasing wealth of the growing middle classes is fueling demand for luxury goods. India and Mainland China are two of the countries in this group which are worth focusing on in this regard. BMO Capital Markets estimates that Chinese demand for polished diamonds accounted for 5% or $1 billion of the market in 2010. While this represents a relatively small proportion of the market currently, growth is extremely strong.read more