Prices of gem-quality diamonds could rise to $180 per carat by 2027, with a 10-year return of 4-6% per year, said Edward Lysenker, director of S+Consulting.
As reasons for the price increase, he cited depleted reserves, the lack of new discoveries and the expected growth in demand from countries in the Asia-Pacific region, mainly China.
“In the long term, for 10 years, diamonds could show an average return of about 4-6% per year“, he believes the expert.
In recent years, against the backdrop of external restrictions, Russian investors have been buying diamonds as an alternative to foreign currency. “High returns from diamonds should be expected in conditions of high inflation, during crises and during structural adjustments in financial markets“, Lysenker explained.
Other experts are of the opinion that a recovery in the diamond market is expected in the next 5 years and competition with synthetic diamonds could significantly change the market by then. “Therefore, investing in the market is considered a rather high-risk instrument with opaque prospects. It is not suitable for active trading due to its relatively low liquidity“, they noted.
Investing in diamonds should be considered a long-term investment. “The value of colored stones is universal across the globe, regardless of geography or time. When investing in investment diamonds, you should know that this is a long-term investment with relatively low returns, but also low volatility and minimal storage costs“, analysts explain.
It is also important for investors to understand the quality characteristics and certification of the stone, as this will provide additional liquidity when disposing of the investment.