Diamonds vs gold

Commodities are referred to as an alternative investment category. Especially diamonds and gold are often subjects of a comparative analysis by potential investors. We summarize here the most important differences between both natural resources:

Safe havenMediumHigh
CAGR* (1985 - 2010)8.9%10% for 3 ct
Longterm volatilityHighLow
Weight for the same value**150 gr0.2 gr for 1 ct
Esthetics / Emotional valueMediumHigh

*Compounded annual growth rate

**Based on 1oz Gold Price and 1ct Diamond Price, Jan 2013

Although diamonds and gold appear together in jewellery, the valuation of these 2 resources is completely different. These differences can be best explained by the fact that each diamond is a heterogeneous and unique piece with its own specific characteristics whereas gold is a homogeneous substance which can be valued as a commodity.