Which factors influence the price of a diamond?

  • What role does the economy play?
  • What influence does the quality have?

Diamonds are coveted right across the world as a result of their luxurious appearance, their brilliance and their huge intrinsic value. But the diamond’s future value is the most important element for investors. What determines whether a diamond will go up or down in value? How much depends on the general financial market and the diamond market’s specific features?

Which role does the economy play?

Even though the economy plays a major role in the price of a diamond, this price only reacts to economic fluctuations very lightly. This crisis-resilience is largely down to the diamond’s intrinsic value, which even continues to be a valuable investment during times of crisis. The price of a diamond also fell the least of all raw materials during the major stock market crashes, like the one in 2008. Added to this is the huge increase in economic prosperity, resulting from the increasing purchasing power and rising interest in luxury goods from the global middle class.

The diamond giant De Beers’ market share also has a major influence on the price. They will start mining less intensively in case of falling levels of demand, which will still allow the price to stay stable.

What influence does the quality have?

Whether a diamond increases or falls in value is often also dependent on the quality of the diamond. Certified diamonds will very rarely fall in value. Synthetic diamonds, which can be artificially created, usually experience a reversed trend. That is why we only recommend natural diamonds as investments.

Where can I find the right diamonds for my portfolio? What should I do if my diamond still suffers a slight drop in value? Ask BNT Diamonds’ diamond experts for advice for your investment.

Author: San Meuleman
Source: BAUNAT

With this article, BAUNAT strives to inform you thoroughly about investing in diamonds. No investment can be guaranteed to be without risk or fully according to your expectations. That is why we recommend to research the risks and aspects of investing in diamond properly to ensure that you make the right choice for your portfolio.


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