Editor’s Note
This article examines the investment merits of gold versus diamonds, questioning whether the latter’s sustained high prices signal a wise opportunity or a speculative gamble akin to cryptocurrencies.
Gold and diamonds are both high-value items. While diamonds are often advertised in an extremely attractive and romantic manner, do you know which is the best for investment? The Mint spoke to experts on this matter and sought to understand: with diamond prices having been at high levels for over two decades, is it wise to invest in them? Or could investing in them be a profitable deal, similar to cryptocurrencies?
Radhika Gupta, CEO of Edelweiss Mutual Funds, commented on this:
If we talk about diamonds, the market is negatively affected by lab-grown diamonds. The impact of lab-created diamonds has not only affected the value of natural diamonds but has also reduced the demand for diamonds in the market. This shows that advancements in technology can sometimes cause commodity prices to either remain stable or decline.
Deepak Shenoy, founder of Capital Mind and a well-informed market expert, told The Mint:
An article was published in The New York Times about some extremely expensive diamonds, which explained that some people bought diamonds and tried to resell them but could not. Even shops were not willing to take them back. If we talk about Indian jewelers, they do not give you money in exchange for diamonds; instead, you can exchange them for other jewelry.
Abhishek Kumar, Chief Investment Advisor at SahajMoney, says:
Furthermore, the diamond market is controlled by only a few suppliers. For example, De Beers controls the supply of diamonds to regulate their price. Now, there is no shortage of artificial diamonds in the market, so their supply is not limited, and it is also difficult to determine which is real and which is an artificial diamond.
In summary, it is clear that in terms of investment, gold is far better than diamonds.