Investing in Diamond vs Gold | BNT Diamonds
Untitled design 22

Investing in Diamonds vs Gold

When investing, commodities are referred to as an alternative investment category. Commodities are economic goods or resources that hold financial value. Diamonds and gold, in particular, are popular investment commodities. As both are natural resources and precious metals or stones, these goods are often subject to comparative analyses by potential investors.

So what are the main differences between investing in gold and diamonds, and how can you tell which is the right investment decision for you?

Below, we have summarised the most significant differences between both natural resources below:

Gold

Diamonds

Safe haven

Medium

High

CAGR* (1985 - 2010)

8.9%

10% for 3 ct

Long-term volatility

High

Low

Weight for the same value**

150 gr

0.2 gr for 1 ct

Transportability

Low

High

Tangibility

Medium

High

Esthetics / Emotional value

Medium

High

Certified

Yes

Yes

Market

Public

Private

*Compounded annual growth rate

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

Although diamonds and gold are often paired together in jewellery, the valuation of these two resources is entirely different. One of the best explanations for this is that each diamond is a heterogeneous and unique piece with specific characteristics. In contrast, gold is a homogeneous substance that can be valued as a commodity.

As shown on the chart above, diamond investments offer low volatility with a higher compound annual growth. These insights show diamonds generally provide a greater and more reliable return on investment. Meanwhile, they offer a higher tangibility and emotional value over gold investment.

Another key difference between the two commodities is that gold is traded on the public market, whereas the diamond trade is private. Though both goods can hold certificates to solidify their value, it may be easier to convert diamonds to cash over privately traded diamonds.

Ultimately, both gold and diamonds are popular and viable investments. But, diamonds can offer higher security if you have the correct information before investing. BNT Diamonds provides expert insights and extensive collections of investment diamonds. Get a quote for our high-quality investment diamonds or contact one of our experts today.

Learn more about diamonds as an investment

Higher quality banner