Diamond investments Vs Gold

When it comes to investing in precious commodities, two investments stand out above all others. Diamonds and Gold. Gold has been traded for centuries and has stood the test of time as both a reliable and relatively risk-free investment however, diamonds, in particular coloured diamonds, have proved to be a canny investment choice for investors looking to make large scale returns in a relatively short amount of time. Both assets have similar advantages as an investment, for example they both act as a hedge against inflation and they are both finite resources meaning they have an actual value as opposed to stocks and shares which are wholly reliant on the market to determine their worth. They are also both easily stored and fairly portable should you need to transport the goods or take them with you which is an important consideration when deciding where to invest your money. In terms of liquidity however, Gold holds up far better as an investment choice. Gold is traded everywhere in the world and can be traded fairly easily whereas diamonds are much harder to value and can be difficult to sell on the open market.

If you were to measure both assets in terms of the risk involved, then most experts would recommend gold as an investment. It is currently very difficult to predict the true value of coloured diamonds as there is no real market price. Most coloured diamonds are sold via private auction and their value is based on individual criteria such as cut, clarity and colour. This makes diamonds a much riskier investment. However, with great risk comes great reward and coloured diamonds have the potential to provide much greater returns than gold. Not only are they considered rarer and considerably more scarce, (Only one diamond in every 10,000 is a coloured diamond) but supply is also running out much faster due to escalating mining costs and dwindling resources. The Argyle mine in Australia is currently the biggest supplier of coloured diamonds in the world and responsible for 90% of total pink production. The mine is scheduled for closure in 2020 making these precious gems highly sought after among investors. In the last decade coloured diamonds have continued to appreciate in value year on year making them a much less volatile investment than gold which has fluctuated in value dramatically. Pink diamonds have appreciated by an incredible 10% per annum making them a particularly sound invest choice. When deciding where to invest your money, you should look at your investment goals and what you’re looking to achieve from an investment perspective as there are pro’s and con’s to both.

Diamond market harder to value

Gold more liquid

Harder to invest in diamonds – need to know about the four c’s

Diamonds hold their value better

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