Advertisement

Why diamonds have lost their lustre

Diamonds may be a girl’s best friend, but they have done precious little for investors lately.

Diamonds may be a girl's best friend, but they have done preciouslittle for investors lately. The Rapaport Diamond trade index,which tracks the average asking price of the top 25 best-qualityone-carat stones, has hit a near-seven-year low of around 7,400.In 2011, it peaked at 12,000. The price of rough diamonds fromkey producer De Beers fell by 15% in 2015, as a build-up ofsupply has coincided with a cooling retail demand.

Advertisement - Article continues below

The latterstems largely from a slowdown in China, the second-biggest retailmarket after the US, as Finanz und Wirtschaft points out, wherethe impact of a slowing economy has been compounded by acampaign against corruption. It will take some time for the supplyoverhang to be worked off, as mine output is only expected topeak in 2017. Don't expect a recovery in rough prices "for at least 12 months", analysts at brokerage Liberum told the FT.

Advertisement
Advertisement

Recommended

Visit/investments/commodities/600639/commodities-look-cheap
Commodities

Commodities look cheap

Gold may be on a bull run, but industrial commodities, including copper, zinc and aluminium, remain cheap.
17 Jan 2020
Visit/investments/commodities/industrial-metals/601598/the-best-bet-in-the-base-metals-rally
Industrial metals

The best bet in the base metals rally

The prices of key industrial metals have been enjoying a spectacular rally.
3 Jul 2020
Visit/investments/commodities/silver-and-other-precious-metals/601523/diamond-glut-wont-be-forever
Silver and other precious metals

Diamond glut won’t be forever

Diamond stocks have been piling up after suppliers refused to cut prices. But demand could soon pick up.
19 Jun 2020
Visit/investments/commodities/601433/commodities-possibly-the-biggest-opportunity-in-todays-markets
Commodities

This looks like the biggest opportunity in today’s markets

With low interest rates and constant money-printing, most assets have become expensive. But one major asset class hasn’t. John Stepek explains why com…
2 Jun 2020

Most Popular

Visit/investments/property/601606/house-prices-crash-uk-property-prices-falling-where-next
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
Visit/economy/inflation/601584/the-end-of-the-bond-bull-market-and-the-return-of-inflation
Inflation

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020
Visit/investments/stockmarkets/601611/nasdaq-all-time-high-markets-and-the-real-economy
Stockmarkets

How can markets hit new record highs when the economy is in such a mess?

Despite the world being in the midst of a global pandemic, America's Nasdaq stock index just hit an all-time high. And it's not the only index on a bu…
3 Jul 2020