A History of
Holding Its Value
Since Roman times diamonds
have been coveted for their
beauty and rarity. Unlike paper
currency, which have historically
retained value as long as the
country is recognized, and
in good standing a natural
diamond has maintained value
across the world and throughout
thousands of years because of
its natural supply and demand.
Collectors see a natural coloured
diamond as a way to pass on
and preserve their wealth from
one generation to the next and
from country to country.
Since ancient times, people have
valued the unique properties of
the precious diamond. Diamonds
don’t corrode and can’t be
melted over a common flame,
making it easy to work with
and put in jewellery. Moreover,
coloured diamonds have unique
and beautiful colours, unlike each
other. It’s a collector’s dream.
Natural Coloured Diamonds have
been unearthed in every colour
of the rainbow, the physical
conditions necessary for a
diamond to have colour naturally
don’t often occur, making natural
coloured diamonds extremely
rare. It is estimated, that only a
1 in 10,000 chance that any
diamond will possess any natural
colour, whether that colour is
pink, green, yellow, blue, brown,
grey or any shade of the colour
spectrum.
Weakness of the
U.S. Dollar
Although the U.S. dollar is one
of the world’s most important
reserve currencies, when the
value of the dollar falls against
other currencies as it did between
1998 and 2008, this often
prompts people to flock to the
security of gold and coloured
diamonds, which raises their
prices . The price of gold nearly
tripled between 1998 and 2008,
reaching the $1,000-an-ounce
milestone in early 2008 and
nearly doubling between 2008
and 2012, hitting around the
$1800-$1900 mark. The decline
in the U.S. dollar occurred for a
number of reasons, including the
country’s large budget and trade
deficits and a large increase in
the money supply.
Inflation Hedge
Gold and diamonds have
historically been an excellent
hedge against inflation, because
its price tends to rise when the
cost of living increases. Over the
past 50 years investors have seen
gold and diamond prices soar
and the stock market plunge
during high-inflation years. This is
because when fiat currency loses
its purchasing power to inflation,
gold and diamonds tend to be
priced in those currency units
and thus tends to arise along
with everything else. Moreover,
gold and diamonds are seen as
a good store of value so people
July 2020
Polo De’Marco