Diamonds lose their sparkle for investors

Diamonds are no longer among investors’ best friends, says Chris Carter

Pink diamonds are among the most sought-after © Getty

With investors fleeing for safe haven assets, now is the time for gold to shine. Diamonds, on the other hand, have lost their sparkle. In March, when stocks were plumbing new depths in the coronavirus crisis, the price for a single diamond carat fell by 6.8%, according to the RapNet Diamond Index. But the woes facing the industry actually go beyond the current crisis. Over the year, the single-carat price is down by 13.1%.

What’s going on? Well, for starters, Covid-19 has exacerbated an existing problem. “India, where 90% of the world’s rough diamonds by volume are cut and polished, is in lockdown,” says Rachel Millard in The Daily Telegraph. That has resulted in a 50% drop in diamond exports from this processing hub. “For an industry that depends on being able to dig jewels out of a mine from Canada to Angola, fly them to the trading hubs of Antwerp or Botswana, and sell them to wealthy, hopeful consumers from London to New York and Beijing, coronavirus has been a fiasco.”

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Chris Carter
Wealth Editor, MoneyWeek

Chris Carter spent three glorious years reading English literature on the beautiful Welsh coast at Aberystwyth University. Graduating in 2005, he left for the University of York to specialise in Renaissance literature for his MA, before returning to his native Twickenham, in southwest London. He joined a Richmond-based recruitment company, where he worked with several clients, including the Queen’s bank, Coutts, as well as the super luxury, Dorchester-owned Coworth Park country house hotel, near Ascot in Berkshire.

Then, in 2011, Chris joined MoneyWeek. Initially working as part of the website production team, Chris soon rose to the lofty heights of wealth editor, overseeing MoneyWeek’s Spending It lifestyle section. Chris travels the globe in pursuit of his work, soaking up the local culture and sampling the very finest in cuisine, hotels and resorts for the magazine’s discerning readership. He also enjoys writing his fortnightly page on collectables, delving into the fascinating world of auctions and art, classic cars, coins, watches, wine and whisky investing.

You can follow Chris on Instagram.