Gone are the days when diamonds are just a girl’s best friend. In the present century, it’s an investor’s best friend as well. From being something to pawn in jewelry stores, diamonds are slowly making its way to the list of preferred investment. But how did that came to be?
Diamond slowly replacing gold
The value of pawn diamond has been steadily increasing throughout the years. It has increased so much that it can be at par with gold, of even replace it, when it comes to choosing tangible investments. The increasing appetite of China towards diamonds (i.e. diamond engagement rings) have contributed to the stability of its value. This, along with the United States’ increasing demand for the jewelry has helped marked diamond’s slot as one of the best investments.
Aside from increasing demand from two of the world’s stronger economies, diamond is slowly claiming the top spot because gold’s value itself is slowly sliding down. The value of gold has dropped as much as 30% in the previous years, allowing diamond to have a close fight for the first spot.
Gray areas of diamond investment
Despite the growing significance of diamond as an investment, some investors are still adamant to spend for the shiny jewelry. Unlike gold, which has a standard measurement of value (i.e. weight), the value of a diamond is dependent on different factors. The value of a diamond depends on its cut, carat, and color. A pink diamond might have cost more a few years back, but chocolate diamond is slowly becoming a trend at present pushing the value of pink diamond lower compared to before. Because diamonds are man-made, unlike gold, preference of buyers also affects its price. Due to these factors (and more) some investors still prefer to invest more in gold rather than diamonds.
It might take time before diamonds can fully replace gold, but the fact that its value is steadily increasing a good reason to keep yours to be able to watch it grow in the future.