Gemstones, such as diamonds, emeralds, rubies and sapphires, have intrinsic value. Like investing in precious metals, gemstones hold their value, they are attractive, and they are always in demand. Moreover, when stock markets are declining and currencies are losing their value, gemstones have proven to be a reliable store of value, as well as a compact, portable and private investment.
The intrinsic qualities of something have to do with its nature. Anything intrinsic comes from within.
Even with the global financial crisis that devastated economies, the price of precious gems – emeralds, rubies, sapphires, and diamonds for instance – are at or above 2008 levels; unaffected by the volatility of world markets.
Gemstones for Investment
Thanks to the information shared by prominent independent gemstone collectors, like J.P. Morgan and Tiffany’s Dr. George Frederick Kunz, investors have gained a deeper appreciation for many varieties of precious gems.
Thanks to a global decline in the production of quality gemstones from mines in Russia and Canada, as well as the depletion of the De Beers stockpile and the rising demand across Asia, the value of diamond is poised to surge.
The overall view is that prices will go up because of buying in markets such as India and China, where new wealth is emerging. – Wealth X
Despite the efforts of a worldwide search, there has been a very low rate of kimberlite discovery. Mine production of diamonds peaked in 2006 at an annual rate of 175 million carats, but is currently down to 130 million carats a year. Citigroup has reported that new discoveries could see industry production reach 160 million carats in 2018, but if economic growth has normalized by then, diamond demand should be far greater than that level at that time.
Regarded as a rare gemstone, the emerald has historically been a symbol of beauty, status and power, valued particularly for its rich color.
I would look at emeralds as a way of playing the huge demand for luxury goods from China and the Middle East. – Caspar Trenthard, Investment Director at Standard Life Investment
Colombia is the region with the most valuable emeralds, followed by emerald gemstones from Brazil, and several countries in Africa.
Ruby is regarded as the rarest of all colored gemstones. Although Burmese rubies are by far the most valuable colored gem, fine unheated rubies from other locations – such as Madagascar, Mozambique and Tanzania, are very quickly rising in value.
It is important to note that rubies tend to have inclusions, so when studying the precious stones, the gems’ color is more important than perfect clarity.
According to historic sale records from top auction houses, blue sapphire has proven itself to be the second most popular colored stone for investment.
The rarest sapphires are from Kashmir. But, with no new gems mined there in more than 100 years, the next most valuable sapphire originates from Burma, followed by Ceylon and Madagascar.
Other colored sapphires that have become increasingly popular with the investment community, are yellow, pink and padparadscha.
Gemstone Investment Rate of Return
Investors can expect that the average rate of return on a gemstone investment is equal to the rate of inflation. While there are instances where values have risen significantly quicker, these tend to be due to a specific incidents, such as a mining depletion, or a new medical/industrial application. As you can well imagine, the rate of return when this occurs is substantially higher than average.
Jewelry purchased at a store is meant to make you pretty, NOT rich.
Like any investing option, making an investment in gemstones requires that you be knowledgeable, and confident about your purchase. Let us help you invest.