The Resolute Asset
History shows, colored diamonds have been one of the best performing assets during periods of inflation and currency devaluation. Since the early 1970’s, they have increased in value by an average of 11% a year – even in times of distress.
Supply & Demand
From the Sotheby’s Auction in Geneva held last November 2010 it is clear that demand is holding up extremely well. Over $100 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 colored diamonds as a store of value, especially in the economy we are in today.
A Fast-Dwindling Supply Practically Guarantees Higher Prices. From Australia to South Africa, diamond supply around the world continues to decline. In the past 18 months Rio Tinto, BHP Billiton and De Beers saw its production significantly diminished. Australia’s famed Argyle mine reported a 30% decline and a possible upcoming closing of the mine. Yet, all did amazingly well the past few months sales and profit wise.
This supply crunch is helping to keep prices stable during a year that’s seen almost every asset class get torn to shreds. At the same time – demand from haven-seeking investors and jewelers has put a floor under prices – and caused some diamonds to rapidly appreciate in value.