Diamonds regain their sparkle as gem prices rise

After five years in the doldrums, the price of natural diamonds is climbing again.

Diamonds are starting to sparkle again, says Rachel Millard in The Daily Telegraph. The sector has been hit hard by Covid-19. The value of diamond imports to India, where the vast majority are cut and polished, collapsed from $1.5bn in February to just $1m in April. Yet prices have since recovered and the polishers are busier than ever. Diamond sellers have a Christmas sales surge to thank, say Thomas Biesheuvel and Yuliya Fedorinova on Bloomberg.

The industry had been in “the doldrums” for five years as wealthy shoppers splurged on luxury travel. Yet the virus has knocked out that competition. Still, some fear that the re-opening of the leisure industry later this year could mean the recovery proves a flash in the pan. Annual diamond jewellery sales are worth $80bn worldwide.

The diamond market faces a long-term challenge from artificial gemstones. They are chemically identical to natural diamonds and indistinguishable without specialist equipment. Industry giant De Beers has met the problem head-on. 

In 2018 it began selling synthetic diamonds for the first time, hoping to brand them as a cheap and cheerful but inferior product to the “real” thing. Early indications are that that strategy is working, says Millard. The premium a buyer pays for a natural diamond over a lab-grown one has widened of late. A natural diamond costs roughly $1,465 compared with $600 for an artificial equivalent.

Recommended

Don’t try to time the bottom – start buying good companies now
Investment strategy

Don’t try to time the bottom – start buying good companies now

Markets are having a rough time, so you may be tempted to wait to try to call the bottom and pick up some bargains. But that would be a mistake, says …
1 Jul 2022
Share tips of the week – 1 July
Share tips

Share tips of the week – 1 July

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
1 Jul 2022
How to invest in copper, the most important metal in the world
Industrial metals

How to invest in copper, the most important metal in the world

As the world looks to electrify and try to move away from fossil fuels, copper looks set to be the biggest beneficiary. But how can you invest? Rupert…
30 Jun 2022
Car hire and the strangeness of the post-pandemic economy
UK Economy

Car hire and the strangeness of the post-pandemic economy

A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset We…
30 Jun 2022

Most Popular

How to find the best dividend stocks
Income investing

How to find the best dividend stocks

Stocks that pay dividends tend to outperform the market over the long run - as well as providing an income. Here, Rupert Hargreaves explains the best …
28 Jun 2022
Gold has been incredibly boring to own – but that’s no bad thing right now
Gold

Gold has been incredibly boring to own – but that’s no bad thing right now

Stocks, bonds and cryptocurrencies have all seen big falls this year. But gold remains at its one-year average. It may be dull, but it’s doing what it…
29 Jun 2022
What the end of the 1970s bear market can teach today’s investors
Stockmarkets

What the end of the 1970s bear market can teach today’s investors

The 1970s saw the worst bear market Britain has ever seen, with stocks tumbling 70%. Things have changed a lot since then, says Max King. But there ar…
28 Jun 2022