As long as NOVITA DIAMONDS has existed, it has always been committed to offering customers an incredible value without destroying our planet or exploiting its resources. This singular goal also compels us to write controversial yet insightful topics about the diamond industry to advise and inform our customers like no other company. With that in mind, here is another eye-opening piece written jointly by our gemmologists and global marketing manager.
Natural Pink Diamonds Being A Good Investment is Nonsense!
The worst investments you could make are Natural Pink diamonds
Due to the overwhelming popularity of their colourless or white diamonds, many are unaware that diamonds can naturally come from the earth in several different colours. Blue diamonds, green diamonds, yellow diamonds, champagne diamonds, among others, all have their own unique characteristics. However, despite their relative scarcity, at least compared to mined diamonds, coloured diamonds, especially the pink ones, are not good investments in any way. The news of the Argyle mine in Australia ceasing its production by 2020 triggered a frantic craze of hoarding natural pink diamonds all over the world. Pink diamonds can be found in other places throughout the world, but the myth that the Argyle mine in Australia is the only place to get them is false and deliberately perpetuated to increase the sale volume of pink diamonds.
Brazil and Russia also produce natural pink diamonds
Our reason for being certain that pink diamonds are not running out is simple; they are not restricted to a single mine in Australia. Pink diamonds are also mined in Russia and Brazil, and their mines are far from bottoming out, not to mention all the mines that are yet to be discovered. The reason Argyle mine closed was due to mundane economic forces. They were facing the combined pressure of increasing operational costs and a stagnant diamond market, rendering operating the mine commercially unviable. Consequently, the mine can be restarted in the future when the conditions are favourable, for example, by reducing costs through new mining technology.
For a clear understanding of why pink, or any other coloured, mined diamonds are not a good investment, we will need to look at some hard numbers. To start with, you will be met with a 200% retail markup for a natural pink diamond. In other words, a pink diamond that actually costs $10,000 will be sold to you for around $30,000. Now let's say you want to sell it back the next day. Naturally, you would have to go to a diamond dealer or a shop that specialises in second-hand diamonds. You might be shocked by their offers for your pink diamond; you will be very lucky even to receive an offer near $8,000. Many dealers will even happily make low-ball offers between $5000-7000. Why such a dramatic difference? Quite simply, the dealer you are selling to could buy the same type of diamond for $10,000 from his supplier. There will always be an advantage to being invoiced directly by the supplier rather than an individual, even with the associated increased paperwork.
In order to emphasize how lousy an investment pink mined diamonds are, let's compare them with the universally accepted standard, which is gold. Unlike pink diamonds, commodities like gold have set world spot prices, which have no official recognition. Suppose you bought $30,000 worth of gold bullion for example and you decided to sell it the next day. In that case, you could confidently walk into any gold bullion dealer and receive 98% of the value immediately, which is $29,400.
Note: Complete avoid huge markups when buying colourless or white diamonds. You can get a better deal on wholesale websites such as NOVITA, which works very hard to keep margins low in order to drive a high turnover.