Despite price fluctuations, the scarcity and unrivalled <\/strong>brilliance of natural diamonds has kept investors and buyers interested for decades1<\/a><\/sup>.<\/p>\n\n\n\n To understand their investment appeal, let\u2019s talk about how natural diamonds are formed in the first place. <\/p>\n\n\n\n Their story begins about 4.5 billion years ago, with stardust forming pure crystallised carbon under immense heat and pressure deep within the Earth\u2019s mantle. They were then brought to the surface by volcanic activity to eventually be discovered by humans, firstly in ancient India. <\/p>\n\n\n\n It\u2019s pretty mind-blowing to think that some natural diamonds are between 90 million and 3.5 billion years old, meaning they were formed before humankind even existed. But this is exactly what appeals to buyers and investors and <\/strong>sets natural diamonds apart from their synthetic counterparts, laboratory-grown diamonds<\/a> (also called LGDs). <\/p>\n\n\n\n As natural diamonds can only be found in certain parts of the world (the biggest diamond mines are found in Botswana, Canada, Russia and South Africa, where volcanic sites have the right conditions for recovery), they\u2019re exceptionally rare and precious. <\/p>\n\n\n\n Much like snowflakes,\u00a0leaves\u00a0and us humans, no two natural diamonds are\u00a0exactly the same. Every natural diamond has its own quirks and qualities that make it special and unique, which is\u00a0likely why\u00a0bidding frenzies for famous, super-rare diamonds can escalate quickly \u2013 that natural diamond<\/a> you might have your eye on is genuinely one of a kind!\u00a0<\/p>\n\n\n\n A good example of this is the CTF Pink Star (pictured below), which holds the record for the most expensive pink diamond ever sold at auction \u2013 it sold for 553 million HKD in April 20172<\/a><\/sup>. Pink diamonds are incredibly rare; it\u2019s estimated that around 80% of them originate from the Argyle mine in Kimberley, Western Australia, but only around 0.1% of its total output is pink diamonds3<\/a><\/sup>. <\/p>\n\n\n\n Historically, rarer, more individual items tend to hold their value4<\/a><\/sup> over, say, their mass-produced counterparts. Apart from rarity, diamond resale value, over time, is also largely impacted by collector demand and auction market valuations. <\/p>\n\n\n If you\u2019re looking at natural diamonds from an investment perspective, let\u2019s whizz through some of the numbers\u2026 <\/p>\n\n\n\n In recent history, natural diamonds have shown resilience during financial downturns and remained stable in price. A report released in 2011 by consultancy firm Bain & Company revealed that between 1982 and 2010, the price of a single polished diamond appreciated by an average of 2% annually5<\/a><\/sup>. <\/p>\n\n\n\n \u201cHistorically, demand has been driven by factors such as total private consumption and the size of the middle class in different countries. As the world economy has grown over the past century, so has the demand for polished diamonds,\u201d says the report. <\/p>\n\n\n\n When the COVID-19 pandemic struck in 2020, it caused a temporary dip in diamond price trends, among many other things6<\/a><\/sup>. Despite this, diamonds still outperformed other luxury items during the downturn7<\/a><\/sup>. The following year, prices recovered after many countries\u2019 restrictions began to ease and the world slowly returned to normal. <\/p>\n\n\n\n The post-pandemic boom drove up the price of luxury goods, with De Beers reporting a 34% increase in natural diamond jewellery sales in the US in 20218<\/a><\/sup>.<\/p>\n\n\n\n Whatever your reason for investing in diamond\u00a0jewellery<\/a>,\u00a0it\u2019s\u00a0important to do your homework and be clear about your end goal.\u00a0<\/p>\n\n\n\n If you\u2019re hoping to sell a diamond piece for a profit, keep on top of market trends \u2013 they\u2019ll give you an idea of what types of diamonds (carat, clarity grades and colours, for example) are currently most popular and the potential price you could achieve. <\/p>\n\n\n\n If you\u2019re looking for a unique gemstone that you hope will, one day, turn into a beloved family heirloom, then you must also factor in emotional resonance; find a diamond that speaks to you on a deeply personal level. <\/p>\n\n\n\n Similarly, if you\u2019re looking for diamond jewellery that is likely to turn into a daily staple, consider investing in one that guarantees comfort and \u2013 it goes without saying \u2013 feels <\/em>most like you. <\/p>\n\n\n\n In the end, the answer to the question \u2018How do you know the value of a diamond?\u2019 depends on multiple objective factors in addition to the diamond\u2019s emotional significance. Sales assistants at jewellery stores can also be a great source of in-person intel, as they\u2019ll likely know what kind of jewellery, cuts and styles are flying off the shelves. <\/p>\n\n\n New to the\u00a04Cs of diamonds<\/a>? They stand for carat weight,\u00a0colour, clarity and cut. All four play a role in not just appearance, but also long-term\u00a0diamond investment\u00a0potential.\u00a0<\/p>\n\n\n\n Graded on individual scales, the 4Cs are crucial in determining a diamond\u2019s value as they collectively define a natural diamond\u2019s quality, rarity and perceived beauty. <\/p>\n\n\n\n Cut affects how well a diamond reflects light, directly influencing its brilliance and sparkle. Colour, in fact, measures the absence of colour, with the most valuable diamonds being colourless due to their rarity in nature. Clarity assesses the presence of internal flaws (called inclusions) or external blemishes, with fewer imperfections increasing the diamond\u2019s worth \u2013 again, because flawless natural diamonds are rarer. Carat weight indicates the diamond\u2019s weight, with larger stones being limited and more expensive. <\/p>\n\n\n\n These four metrics provide a standardised way to assess and compare diamonds, ensuring transparency and consistency in pricing and quality evaluation.<\/p>\n\n\n\n If you\u2019re buying a natural diamond as an investment, with the possibility of reselling it in the future, certified diamonds are a must. Having all the right paperwork is imperative. <\/p>\n\n\n\n Polished diamonds larger than 0.3 carat in size come with their own individual report documenting their origin and grading for each of the 4Cs. These are issued by an independent gemmological institute, such as the De Beers Institute of Diamonds. (IOD), Gemological Institute of America (GIA), American Gem Society (AGS), and IGI (International Gemological Institute) <\/p>\n\n\n\n To ensure there\u2019s never any mix-up about which report refers to which diamond, most diamonds will have an inscription on either their girdle (the \u2018waist\u2019 of the diamond) or their table (the top facet) that corresponds with its report. <\/p>\n\n\n\n A grading report is essential when re-selling a diamond because it proves authenticity, something which every buyer will be on the lookout for. <\/p>\n\n\n\n This precise grading is, in most cases, only applied to natural diamonds. Given that most lab-grown diamonds occupy a narrow range of quality characteristics, the GIA has introduced a more streamlined assessment method for LGDs, classifying them as either Standard or Premium based on their quality and craftsmanship. <\/p>\n\n\n\n How do diamonds measure up in terms of financial value? Learn more about diamond value and the various factors that influence it<\/p>\n","protected":false},"author":8,"featured_media":1391,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"[{\"content\":\"Hatton-garden-jewellers.co.uk, The value of diamond over time\",\"id\":\"e1a61967-67c8-491c-bf89-caecb2b00a38\"},{\"content\":\"Sothebys.com, The five most expensive pink diamonds\",\"id\":\"e249936b-99de-4d54-85ff-48103177cb7b\"},{\"content\":\"Sothebys.com, The five most expensive pink diamonds\u21a9\ufe0e\",\"id\":\"30a1b55c-1552-4ca5-98a0-0c0ec5a35102\"},{\"content\":\"Hutchinsonscott.co.uk, Factors that impact the value of antiques\",\"id\":\"36d61d75-7b2a-44ca-8a88-351edb89fbbf\"},{\"content\":\"Media.bain.com\/Images\/PR_BAIN_REPORT_The_global_diamond_industry.pdf\",\"id\":\"3eaf41e4-a480-4391-bf96-6019e4172e53\"},{\"content\":\"Debeersgroup.com\/~\/media\/Files\/D\/De-Beers-Group-V2\/documents\/reports\/2022\/DeBeers_DIR2022.pdf\",\"id\":\"fdb7e912-3956-424c-8f5f-d9356f6d48ff\"},{\"content\":\"Bain.com, The global diamond industry 2020\u201321\",\"id\":\"1ea5f038-9352-4e52-bd0e-44d9a130ca62\"},{\"content\":\"Debeersgroup.com\/~\/media\/Files\/D\/De-Beers-Group-V2\/documents\/reports\/2022\/DeBeers_DIR2022.pdf\",\"id\":\"19700c0a-b3a6-4fa4-b646-32d275efb1d2\"}]"},"categories":[4],"tags":[],"class_list":["post-1394","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education"],"acf":[],"yoast_head":"\nWhy natural diamonds are so rare and why rarity affects value<\/h2>\n\n\n\n
The power of uniqueness in investment-grade natural diamonds<\/h2>\n\n\n\n
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<\/figure>\n<\/div>\n\n\nDiamond price history and what past trends suggest<\/h2>\n\n\n\n
What to keep in mind before investing in natural diamonds<\/h2>\n\n\n\n
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<\/figure>\n<\/div>\n\n\nHow the 4Cs impact diamond value<\/h2>\n\n\n\n
Why diamond certification protects value<\/h2>\n\n\n\n
Sources<\/h3>\n\n\n