Only 5% of rough diamonds mined are 2 carats and above, yet these diamonds command 50% of the total industry dollar value - their depleting nature and scarcity of supply may continue to push the prices higher. If this supply over demand mismatch continues, diamonds and jewellery can be expected to increase in prices over the long term, notwithstanding the occasional "ups and downs" of economic cycles and consumer confidence.
Research has shown that silver, gold and platinum have the highest price fluctuations and volatility, providing opportunities for some to take profit when prices are high, but at great risk as prices may plunge. Polished diamonds prices, on the other hand, have grown steadily with the lowest price volatility for period from 2004 to 2011, even during the 2008 financial crisis.
High quality diamonds weighing as little as 2 or 3 grams could be worth as much as 100 kilos of gold. This extreme condensed value, minimal storage needs and convenient portability (easy to carry) often bestow polished diamonds as a form of emergency fund. Moreover, each quality diamond comes with a gemological certificate from a reputable laboratory for identification purpose when selling.
Diamonds and jewellery are something personal and sentimental that one generation may wish to pass on to the next as gifts - a simple process, and yet over time, appreciating in value with very little need for constant care and attention, unlike property that is inherited.
For an instance, the price in USD per carat rate for a 5 carat ideal-cut, D-IF polished diamond can be priced as much as 5 to 10 times more than an equivalent 1 carat weight, whereas 24 grams of gold is the same price per gram as it is for 100 grams of gold with the same purity.