To put it plainly, India as a country is obsessed with gold & diamonds. The world has a vast history with precious gems & diamonds and India is recognised to have discovered and mined them approximately 6,000 years ago. Since then we have developed a complex relationship with the substances.
In terms of investment, gold remains a solid choice and has been for thousands of years. Diamonds on the other hand are a completely different story. The public have been lured into thinking diamond investments are a good idea by fairy tale advertising campaigns when the truth is the contrary.
Gold stands the test of time
25% of the globe’s gold is purchased by India. 800 tonnes of gold was consumed and the country imported 951 tonnes of the precious metal in 2012. Those figures are about 6 times more than the US consumes per year.
There is a reason behind gold’s popularity in India however: it has stood the test of time. The rare substance has been a wise & safe investment choice for hundreds of years and continues its prosperity into the modern day. There are many factors contributing to this fact.
Between 2001-2012, the value of gold has risen by around 501%. This works out at an 18% rise per month consistently for 11 years. This makes it a great product to be involved with during the economic downturn involving currency crises, market declines and political issues.
On the contrary, the state of the diamond industry is far less clear-cut. Cartels have controlled diamond prices for the last 100 years or so. Through clever marketing and advertising campaigns, they have managed to convince people that the value of diamonds is solid and comparable to precious metals such as gold & silver. These substances can’t be synthetically reproduced but diamonds can, making them far more precious.
The connotations that come with gold are those of wealth, rarity and significance since it’s discovering. Diamonds have only become popular in the recent past, but gold has seen steady popularity for thousands of years, and that history is a main factor in the difference between gold and diamond investments.
More to diamonds than meets the eye?
A diamond should be considered more of a material possession than an investment. You should be looking at diamonds for their sentimental, aesthetic and personal value rather than a moneymaking opportunity
You can rely on the price of gold appreciating over time, as it is a precious substance and will always be one. We can know this for sure, but there is no way to tell how much diamonds have actually appreciated over time.
If you are planning on making an investment in diamonds you should know they do not have a rich history. They only become linked to luxury and expensive lifestyles in 1938 and as well as this, they are not rare. There is an abundance of diamonds that heavily exceeds the demand, and due to the fact they can be made artificially, their value is not high at all.
You can now see the division between the gold and diamond markets. Gold is a rare substance that has lasted thousands of years, whilst diamonds haven’t even been luxurious items for 100 years. The supply & demand laws that apply to gold, as a naturally occurring and highly valuable metal, do not apply to diamonds. If you are investing, don’t just go on what is more aesthetically stunning, look further.