Diamonds were long praised for their beauty and rarity, yet they continue to show themselves valuable investments.
Before you start any investment, you need to know some basic information, right?
Like where your diamond is coming from, shape, number of carats, etc.
Globally, diamond statistics determine the price of diamonds. Of course, the more diamonds are mined, the higher supply will be. And if that supply outgrows demand, the price will be lower since sellers will just want to get rid of the product. On the other hand, if there’s significant demand and suppliers cannot mine enough and provide enough for everyone, the price will grow. That’s why knowing some basics about diamond statistics and prominent players can help you determine when is the right time to enter the diamond market.
Diamond statistics in 21st century
If you look back at the 1960s, for example, you will see that the diamond price for a carat was around $2,700. In 2015, the price for precisely the same diamond was on average $29,650. It shows us that over the last 50 to 60 years, diamond prices increased tenfold.
Despite the widespread belief that diamond prices are stable and not changing, that is not true. Yes, diamond is more durable than other assets, such as shares, and it’s less affected by global changes and wars, but the price increases significantly.
Since diamonds are a long-term investment, you just need to be patient enough to see the change.
At the beginning of the 21st century, more precisely in 2005, we had a global diamond production of 177 million carats. After the market crisis in 2008, the following year, the production fell to 120 million carats, obviously affected by the global events. By 2017, the production managed to recover and outshine all the years before with a total production of 152 million carats. In 2020, again, thanks to global pandemics and a complete shut down, we’ve got only 111 million carats.
However, regardless of these production oscillations, diamonds never lose buyers. The market found new ways to function through online selling and resumed being as valuable as any other market. Many of the retailers turned to local sellers, while customers turned to online stores.
What was the reason for such an increseament in diamond production between 2005 and 2017? Global power change. Many young people earned a lot of money thanks to new, more productive, and more paid jobs. Just look at the IT sector and their salary growth. And yet, despite being new generations, all of them still believe that diamond is a valuable asset and the best gift you can give.
According to statistics, the biggest diamond consumer in the USA, thanks to buying diamond wedding rings. With the great chance to outrun them, right after the USA is India, with 21.3% of diamonds purchased. Afterward, we have China, Hong Kong, UAE, Belgium, and more.
Not so long ago, De Beers was the most powerful diamond mining company and was dictating prices all around the globe. The diamond market was not transparent, and only the richest that were not afraid of losses were entering this market. Nowadays, with ALROSA, Debswana, and many others, prices are being formed on the market itself. ALROSA outshined De Beers with 38.5 billion carats produced in the past year. All this led to market transparency, which led to new buyers, which led to higher demand. And with higher demand, as explained, prices are growing.
Diamond market in the future according to statistics
According to experts, the diamond market (and we speak about both rough and polished diamonds) is expected to rise by 2024. At first, it will not seem so since the market itself needs to recover after Covid-19 pandemics and thousands of carats on stocks. The last quarter of 2020 showed us the light at the end of the tunnel, and we believe the trend will continue. Experts predict a minor price drop in 2021, while from 2022, the price should grow accordingly. Each year, the diamond market should gain another 5%-8%, meaning that anyone who enters the market right away will have a great chance to profit from it.
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