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A ring with a flawless clear rare diamond was sold for $2.7 million, on June 12, at the Christie’s Magnificent Jewels auction. The ring was valued in between $2.5 million to $3.5 million and it had a type IIa piece, weighing 15.36 carats, embedded in a heart shape pendant necklace. One of the most popular diamonds - the Pink Start was sold for £57.3 million.
Diamonds are mostly associated with millionaire investors and are too bright for the first-time investors but investing in diamonds can provide long-term benefits. Mostly buyers prefer fine art or wine, in comparison, to diamonds to diversify but even these investments require a great knowledge of product and rich buyers, at the same time, diamond offers secure long-duration option.
Demand and profits
With a healthy consumer sentiment, increasing demand in China and increased budget fueling into diamond industries, branding and new marketing strategies can raise future demand of diamond.
Diamond mining is expected to reduce in 2018, while, demand is still high in some Middle-East regions, for diamond. In 2018, it is expected that 2 to 4 per cent of diamond demand will keep the market afloat.
The Zimnisky Global Rough Diamond Price Index show the prices will be up by 2 per cent and polished prices will be up by 3 per cent, by the second quarter of 2018.
Advantages offered by online diamond investment options
Technology offers new strategies in the diamond sale and marketing, where the producers are using new tools and products to perceive market’s demand. Today, some rare diamonds can be bought online, and the buyer can get a certificate of authenticity from the seller.
Risk factors in diamond trading
There can be primary, industrial or long-term risks involved in diamond trading.
Volatile economic conditions and higher interest rates could have negative impact on diamond industry, as the purchasing power of investors will reduce.
Diamond market is more or less centralized driven by a few brands. These companies have strong marketing strategies and they control the lion’s share in the global diamond supply.
Secondly, the introduction of lab grown diamonds sold at 30 to 40 per cent discounted price creates a parallel low cost option in diamond. Lab grown diamond could cause a fall in diamond price over longer durations.
Diamond industry’s long-term risks involved the trends in social norms and preferences e.g. reducing marriage rate and couples not gifting diamond rings on marriages. The preference of younger generation is changing.
Concerns related to the consumer perception about diamonds, and low demand for rough diamond, as well as, the new market of lab-grown diamonds can have clear impact on diamond trading, where the new buyer assumes the lab grown diamonds would be quiet cheap as compared to natural diamonds.
Investment in diamond futures
Diamond trade is complicated as it is not a commodity. The diamond industry is driven by few players and its future market seems impossible. However, in August 2017, the world’s first diamond future exchange was started in India, making gemstone available in future options.
To know more, about the upcoming strategies in diamond investment, check 99Alternatives (www.99alternatives.com).
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