Diamonds dominated auctions and markets last spring.
In 2015 the value of diamonds declined when prices, depending on the size and quality of precious stones, were reduced by around 20 percent.
In 2016, however, they bounced back and the prices increased which calmed the markets and investors. One of the key indicators of the industry, the price index Rapaport, which is responsible for the evaluation of the highest quality per carat, is again raising the value of the index, albeit slowly. The largest manufacturer of jewellery and dealer of gemstones in the world, De Beers, has increased the value of its rough diamonds sold since 2015 by roughly 150 percent. This has led many investors to jewellers and online retailers.
The reason for the decline in prices last year was the weak growth of emerging economies like China. Second, the US dollar gained value against other currencies and this resulted in the price of diamonds rising as they are mostly traded in US currency. The subsequent decline in demand has affected a large number of precious stones, whose price fell further.
Prices have now risen again because the availability of precious gems has declined. Many mining companies have advertised less gems. De Beers, for example, has cut its production by about 25 percent.
It is unclear whether the rise in prices will continue in the coming years.
In the long term however, experts speak of an increase in investment opportunities for diamonds because the market will stabilize and prices are continuously rising. In fact, according to Rapaport, precious stones will always become scarcer and therefore rarer. This is simply due to fields becoming increasingly depleted at the same time as demand is increasing as the world population increases.
The problem of Blood Diamonds
The Kimberley agreement, taken from the place in South Africa in which the agreement was negotiated, aims to solve the problem of so-called “blood diamonds”. The agreement came into force in 2003 and prohibits the trade of jewellery, which, with their sales, finances rebels fighting against the governments from the countries the gems came. It also generally helps to end the trade of gemstones from countries at war. It remains complicated and controversial.
When choosing diamonds or other precious gems you should always find the right jeweller with a trusted supplier. Through the knowledge of the company and the product itself a safe chain of production is ensured right up to the final destination of the finished jewellery on the market.