1. How are supply and demand related?
The value of the diamond has annually increased by an average of 15% since the end of the nineteen fifties. The price evolves independent from the financial markets and is therefore completely crisis-proof. The supply remains stable, whilst demand continues to rise. The growing economies in Asia and the Middle East are important demanding parties.
2. Why physically invest in diamonds?
Even though demand is steadily increasing, the supply has stagnated during recent years, as a result of a lack of new diamond mines. Plus any new diamond mines will take around 10 to 12 years before they are fully productive. Diamond giant De Beers has also responded to falling demand projections by mining less when this is needed. This growing demand, combined with a stagnating supply, continues to push up the market value.
3. What are diamonds used for?
The growing demand does not just come from consumers and growing economies, such as the BRIC countries. Approximately 80% of the rough diamonds end up in the industry. In concrete terms this means that, even in case of a significant decline in the jewellery trade, investing in diamonds will still be profitable. And a decline like this certainly should not be expected with a constantly stable diamond jewellery market.