In China, for example, some of the surging demand for diamonds is driven by an uptick in marriages. Jewelry-driven demand isn’t just a constant, it is increasing as wealth and disposable incomes rise in advanced industrial countries. And since diamonds - like the color black - never go out of fashion, consumer demand will always play a big role in price per carat, cut, color, and clarity. ![]() Most high-quality natural diamonds still flow into consumer luxury products, with jewelry topping the list of non-industrial applications. While there are myriad of factors that impact the price of diamonds, these circumstances may have a dramatic effect on the impact of future diamond values.Ĭonsumers Still Drive Bulk of Diamond Demand Diamond industry analysts predict rough diamond production will remain below pre-pandemic levels for at least five years, likely impacting prices. and EU sanction lists as a result of the conflict, according to the industry’s Jewelers Vigilance Committee (JVC).ĭiamond production in early 2022 was still shy of pre-pandemic production levels and nowhere near enough to match the surge in global demand. In fact, the supply of rough diamonds may be cut by over 25% as Russian-owned Alrosa, the world’s largest diamond producer by volume, was placed on the U.S. In 2022, conflict between Ukraine and Russia disrupted the diamond economy and added an element of scarcity that is already impacting supply. With rough diamond reserves largely sold out, suppliers lacked the geological and technological resources to catch up to unrelenting demand for natural diamonds. Rough diamond production in 2021 was substantially lower than pre-pandemic levels, with the year ending at about 29 million carats, according to Bain.Īs consumer demand spiked, diamond producers liquidated reserve inventory to continue production. The year still closed far short of pre-pandemic years. Parallel to consumer confidence, production widely came back online mid-2020 as jewelry buying showed no signs of relenting to the pandemic. The halt in rough diamond production sent logistic shockwaves across the industry, indefinitely altering the diamond economy. ![]() A multitude of factors are drastically changing the diamond industry, most notably prices, which is good news for the investor seeking a reliable commodity to round out their portfolio.ĭiamonds in recent years have outperformed gold by 62% with less volatility, and that has already been reflected in the Diamond Standard Coin, which was first offered at $5,000 and recently topped $6,700.Ī closer examination reveals why the coming years represent an unprecedented opportunity: limited supply and strong demand.Īmid pandemic turmoil, diamond producers scaled back mining and cutting toward the end of 2019, and many stopped producing entirely for the first half of 2020, due to COVID-19. Diamond Prices Stabilize Amid Limited Supply and Strong DemandĮxperts project diamond prices will steadily increase for at least the next five years, positioning diamond investment assets as a hedge against stock and currency market uncertainties.Ĭompetition for a dwindling supply of natural diamonds is fierce, especially as new diamond investment products dial up demand for quality stones.
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