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Globally, governments are changing how precious metals and gems are traded to promote transparency in the sector. The government wants the sellers to declare the item's source – diamonds or metals.
The Kimberley Process (KP) that monitors such trades said the current system is inadequate, and there is a need to expand the definition of such items where conflict items can be identified easily.
The new generation buyer seeks ethical items where they want to know the full chain of custody of each such item. Last year, the markets were almost stagnant, but this year, mining firms are optimistic and forecasting growth.
Recently, Alrosa claimed growth as the buyers opt for natural ones and reject synthetic lab-grown stones.
The miner said some factors could alter the buyer's overall perception in the sector; nevertheless, the buyers are seeking natural stones with higher resale values instead of synthetic stones to invest in as such synthetic pieces require a lot of resources to be created and are not environmentally friendly.
With the technological changes, the cost of creating such stones has declined significantly. Artificial stones were priced up to $4,000 a carat in 2008, and now, they can be bought for not more than $500 a carat.
These stones have witnessed a price decline, whereas valuable natural ones continue to gain even in the secondary markets, where the buyers seek authentic ones from specified historically renowned locations.
The natural ones are endorsed by celebrities and worn on the red carpet, indicating richness and luxury.
Some international banks have withdrawn from gemstone financing, but the demand for such items continues to increase in alternative regions worldwide.
At the Dubai Diamond Exchange, the seller said a set of gemstones for millions of dollars could be sold in two days as the demand continues to escalate, where the buyer at the exchange carefully examines the stones one by one.
Dubai continues to grow in terms of such trades with higher demand potential, although, in 1997, it was almost nonexistent in the city. By 2003, the sector grew to $3.6 billion, and in 2017, the demand for rough and polished gemstones increased to $28 billion.
Last year, VAT was introduced in Dubai, and the exemption for gemstones came in May 2018, leading to a rise in trade in the second part of the last year. Dubai is close to leading mining countries, and more people seek competitive products.
In India, certain occasions are considered auspicious for buying expensive items, and Akshay Tritiya is one of the days favouring such investment.
The demand is high when people spend on such precious gifts in the current wedding season. Many buyers globally seek such alternatives as the market remains unpredictable with the looming fears related to unresolved trade clashes and disagreements between the US and China.
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