why are diamonds so expensive

Why Are Diamonds So Expensive?

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    The worth of a diamond can be traced all the way back to the time when these stunning stones were originally discovered.

    These stones were discovered thousands of years ago in present-day southern India. India has been a major diamond producer for hundreds of years. Diamonds were subsequently found in Australia, Russia, South Africa, and Venezuela. Discover Temple & Grace's exceptional collection of lab diamond rings, featuring an exquisite and unique range.

    South Africa has surpassed all other countries in terms of diamond production. Several of the world's largest diamond mines are under their control as well. As a result, they may exert considerable control over the diamond trade.

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    Background

    One business had swayed over the diamond industry for over a century. De Beers was the name of that firm. Since the late 19th century, it has been the primary source of rough diamonds, the raw materials for the finished jewellery found in jewellery stores everywhere. De Beers's once-dominant position in the diamond industry has shrunk in recent decades as a result of new discoveries. Even so, it maintained its monopoly on the trade of raw diamonds. For the purpose of selling to cutters and polishers, De Beers purchased rough diamonds from various miners. This allowed De Beers to effectively regulate the annual supply of diamonds on the market. This put it in a strong negotiation position with its customers, allowing it to charge lower costs.

    Diamonds have always been a status symbol for the wealthy and have been highly sought after by royalty due to their exceptional beauty and scarcity before the advent of De Beers. Yet, the rarity of diamonds was challenged as more and more of them made it to market in the first half of the 1900s. De Beers' answer was to fund an ad campaign suggesting that a more significant commitment could be symbolised by a larger diamond in an engagement ring. Because diamonds are so valuable, they were not available in secondary markets. This is because people like you never sell their diamonds. One of the most famous campaign slogans ever was "a diamond is forever." The tradition of giving a diamond engagement ring had existed throughout the world by the turn of the last century. The diamond's cultural significance was solidified.

    New mines in Australia and Canada's Northwest Territories, however, were not included in De Beers' distribution plan at the turn of the millennium. Also, legislators in the US and EU started to worry that De Beers controlled too much of the diamond market. The sales strategy of the corporation eventually failed.

    Are Diamonds Forever?

    When suddenly large quantities of diamonds were discovered in South Africa at the turn of the previous century, they were in short supply. For making diamonds THE sole jewel to symbolise your undying love and devotion, we must give a hearty round of applause to De Beers and their advertising agency's very talented (and female) copywriter.

    A fun fact: N.W. Ayer, the head of the advertising agency for De Beers, first disliked the slogan "A Diamond is Forever '' that copywriter Frances Gerety came up with in 1947 but eventually came around after seeing the slogan's success. As a result of the Great Depression, diamonds had lost some of their lustrs at the time.

    In other words, De Beers's advertising activities created not only the norm of exchanging diamond engagement rings but also the false impression that such rings were in short supply. They were also in possession of the secret codes of the diamond mines.

    How Are Diamonds Priced When They're Not Rare?

    Diamonds are no longer as scarce as they once were because mines can be discovered in countries like Canada, Botswana, and Russia (via mining). Diamonds, not rubies, emeralds, or sapphires, are the most frequent precious stones, according to TrueFacet. Because of this, coloured stones such as rubies, emeralds, and sapphires can fetch higher prices than diamonds.

    The price of a diamond is determined in large part by its quality. The "Four Cs," which stands for carat, clarity, colour, and cut, are used to evaluate and price diamonds. Diamonds' high price tag can be traced back to a number of elements, including but not limited to the cut, carat weight, setting, and certification of the diamond.

    What Makes A Diamond Pricey?

    A diamond's value is affected by a number of factors, including its size and quality. There are four Cs used to describe diamond quality: carat (the diamond's overall weight), cut (the diamond's brilliance), colour (the diamond's transparency; the less colour, the higher the grade, and the higher the price), and clarity (any flaws in the diamond's appearance, as seen by the naked eye or under a microscope).

    A diamond's cut (which can also affect its quality) and whether it comes with a certificate stating that it has been independently appraised, examined, and graded by professionals recognised by the Gemological Institute of America can also affect its price (GIA).

    Hence, a 10-carat colourless diamond with cloudy clarity may not be worth significantly more than a smaller stone with flawless clarity and brilliance, in the opinion of an experienced jeweller.

    The Most Expensive Diamonds Are Fancy Coloured Diamonds.

    The fact that a diamond is naturally coloured (or "fancy coloured") also has a significant role in the diamond's price. Fancy-coloured stones are much more scarce than white, colourless diamonds. According to the DMIA, fancy-coloured diamonds only account for about 0.1% of all diamonds mined.

    Diamonds of all colours, from the most common yellow to the rarest red, are so uncommon that they are typically sold uncut and at exorbitant prices, making them out of reach for most people in the market for jewellery.

    This explains why gems like The Winston Blue (which sold for $23.8 million) and The Pink Star (which sold for $71.2 million) command such exorbitant prices from gem enthusiasts. But compared to these prices, an engagement ring from Tiffany's that costs $10,000 to $15,000 might appear like a steal.

    Which Is Why Diamond Prices Are Rising.

    It's true that there's a severe shortage of fancy-coloured diamonds (such as yellow or rose pink diamonds). Colourful diamonds could be exhausted in a decade, according to some experts.

    Nonetheless, the availability of white diamonds is not in jeopardy. Diamonds have always been extremely rare. Yet, as more and more mines have been operational, the world's diamond supply has increased.

    Synthetic diamonds are also gaining in popularity. These lab-made diamonds are indistinguishable from mined diamonds, yet they are more affordable and less harmful to the environment than the latter.

    Diamonds have been a symbol of rank, riches, and power for generations. The stone's increased value was due to its rarity.

    However, in the 1800s, in the town of Kimberly in South Africa, a true diamond treasure was discovered. The discovery of this mine raised concerns that the market would be flooded with diamonds, driving down their price. De Beers stepped in immediately, brought up the mine, and kept tight control of the global diamond supply to prevent an oversaturation of the market. De Beers only supplied enough diamonds each year to meet consumer demand. Because of this, it appeared as though diamonds were extremely scarce. Diamond prices skyrocketed as a result of the scarcity perception.

    De Beers effectively maintained a stranglehold on the world's diamond mines for the entirety of the 19th century, with the cartel stockpiling diamonds, limiting supply, and driving up demand and prices.

    As part of their marketing push, De Beers began emphasising the importance of diamonds in engagement rings. Demand for diamond engagement rings skyrocketed, pushing away the more traditional choice of rubies and sapphires. The price of diamonds rose as demand reached a fever pitch, and supply was restricted by industry powerhouse De Beers.

    But before you scold yourself for falling for slick advertising, know that diamonds have always been regarded as a precious gem. They believed the stone had magical properties and treated it with great respect. Diamonds have been worn as a badge of honour by the world's nobility for ages. The tradition of giving a diamond ring as an engagement present can be dated back to 1477 when Austria's Archduke Maximilian presented one to Mary of Burgundy during their engagement.

    Diamonds have always been popular, so the current craze is not unprecedented. There is no denying that diamonds are very beautiful and fascinating gemstones.

    Not Everyone Desires A Diamond For Forever

    Diamond engagement rings are just another example of how Millennials aren't interested in following customs simply because they have always been followed.

    As many millennials have no plans to get married, there is no point in buying an engagement ring. They have so much student loan debt that is delaying marriage until 2056 when they will have paid it off, which seems like the most sensible option.

    Millennials are contributing to a shift in the diamond-buying tradition, especially when one takes into account the economic, ethical, and personal motivations for not getting married.

    The value of a diamond should be decided by you and your spouse, not the diamond salesmen, whether you are a die-hard traditionalist who loves her diamonds (like me) or thrilled about various non-diamond (and very uncommon) engagement ring choices.

    And since we're not in the diamond business, we can find you the lowest price on a diamond anywhere, online or off.

    Why Are Diamonds So Expensive?

    A diamond's radiance is unparalleled, and when set in exquisite jewellery, the effect is nothing short of astounding. Yet, such attractiveness usually does not come cheap. What makes diamonds so pricey? Diamond prices are affected by a number of factors, some of which include:

    • Rarity
    • Mining Difficulties
    • Durability

    Rarity

    Diamonds are not particularly uncommon. Nonetheless, diamonds of sufficient quality to be used in jewellery production are extremely uncommon. It is estimated that approximately 30 per cent of all diamonds mined are suitable for jewellery. These gems are so rare that their rarity alone increases their value.

    Mining Difficulties

    Diamonds are formed in the high-pressure, high-temperature environment far below the surface of the Earth. It's not simple to get these gems out of the ground.

    Equipment like hydraulic shovels, trucks, and other heavy machinery is expensive and might be difficult to operate, but they are essential in the mining industry. This machinery is used to haul diamond-bearing ore to the surface for processing.

    After a diamond has been mined, it must be cut and polished by a diamond cutter before it can be sold. Diamond mining, cutting, and polishing are all difficult and time-consuming tasks. Diamonds are more expensive because of how complicated this process is.

    Durability

    On the Mohs Hardness Scale, which evaluates the toughness of a gemstone, the diamond is given a rating of 10. Its high ranking places diamonds among the world's hardest minerals. A diamond's surface is so hard to scratch that it's practically impossible to shatter or crack.

    Diamonds are unique among jewels because of their exceptional durability, among other qualities. It's one of the things that drive up the cost of a diamond. Diamonds are more valuable because they will endure a lifetime, unlike other, more fragile gemstones.

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    How Much Does A Diamond Cost?

    It's true that diamonds are costly. However, the price of a diamond might differ depending on its quality. Diamond prices are affected by a wide variety of factors, some of which are:

    • Cut: The cut of a diamond is defined by its dimensions, symmetry, and facet arrangement. A well-cut diamond will shine brightly and for a long time.
    • Colour: A white diamond's lack of colour can be quantified by its colour grade. The most valuable diamonds are colourless, meaning they lack any yellow or brown tint.
    • Clarity: A diamond's "clarity" is measured by how many flaws and inclusions it has. Perfect diamonds are extremely uncommon and expensive.
    • Carat: The weight of a diamond is expressed in terms of carats. Heavier diamonds are more expensive since they are larger than lighter diamonds.

    Every diamond ever found has never been seen before. A one-carat diamond, for instance, will often cost somewhere between $2,700 and $5,500. This is the price range in which a one-carat diamond will sell depending on its cut, colour, clarity, and carat weight.

    If you are trying to purchase on a tighter budget, keep this in mind. For instance, if you can afford a diamond of a lower colour grade, you can stay within your budget if the colour is not a top priority.

    The World's Most Expensive Diamonds

    There are diamonds worth millions of dollars, yet the average diamond found in jewellery will set you back hundreds or thousands. Consider the following examples of the world's most expensive diamonds:

    • Cullinan I and Cullinan II: The original diamond was 3,106 carats, but it was sliced into two stones weighing 530.2 and 317.4 carats. The nine smaller diamonds extracted from this huge one are worth billions of dollars on their own.
    • Centenary Diamond: It didn't take long for this 599-carat flawless diamond to be reduced to 273.85 carats once it was discovered. Its actual worth is unclear, but it is insured for $100 million, just in case.
    • Hope Diamond: To the Smithsonian Institution, Harry Winston donated the 45.52-carat Hope Diamond. The price tag is put at $200 million.
    • The Regent Diamond: The Louvre in Paris, France, is now displaying a cushion-cut diamond that weighs 140.64 carats. Around $61 million is estimated to be its value.

    These diamonds are ridiculously pricey, yet most diamonds won't cost you millions or billions.

    Through the years, the diamond has earned its reputation as the pinnacle of romantic gestures. 

    Diamonds have been associated with love and mythology ever since they were discovered. The word "diamond" was first used to describe this unconquerable gemstone in ancient Greece. This echoes the ancient Greek belief that a diamond's blazing brilliance is a metaphor for love's unquenchable blaze. Diamonds are traditionally worn on the third finger of the left hand because ancient Egyptians believed that the vein of love (vena amoris) went directly from the heart to the top of the third finger.

    These days, the "4 C's"—colour, clarity, cut, and carat—are how most people evaluate a diamond's worth.

    Conclusion

    Diamonds have been valued since their discovery thousands of years ago in southern India. India has produced diamonds for millennia, while South Africa produces the most. DeBeers dominate diamond mining. De Beers bought rough diamonds from miners to protect its monopoly. As a result, diamonds represent riches and status, especially in royal families.

    Early 20th-century De Beers advertising promoted that a larger diamond in an engagement ring represented a more serious commitment. Diamond engagement rings became ubiquitous around 1900. Due to the lack of new mines in Australia and Canada's Northwest Territories, De Beers' sales strategy failed, sparking US and EU antitrust charges. De Beers' marketing has made diamond engagement rings widespread and high-quality diamonds rare. Canada, Botswana, and Russia mine diamonds.

    De Beers prevented diamond glutes. Instead, de Beers advocated diamond engagement rings over rubies and sapphires. De Beers, the diamond market leader, cut supply as demand grew, boosting prices. Diamonds have long been status symbols for nobles. However, due to economic, ethical, and emotional reasons for not marrying, millennials are redefining diamond shopping.

    Content Summary

    • These stones were discovered thousands of years ago in present-day southern India.
    • India has been a major diamond producer for hundreds of years.
    • DeBeers, the dominant player in the diamond industry, is headquartered here.
    • DeBeers own the world's largest diamond mine.
    • Since the late 19th century, it has been the primary source of rough diamonds, the raw materials for the finished jewellery found in jewellery stores everywhere.
    • Due to new discoveries, De Beers's once-dominant position in the diamond industry has shrunk in recent decades.
    • Diamonds have always been a status symbol for the wealthy and have been highly sought after by royalty due to their exceptional beauty and scarcity before the advent of De Beers.
    • However, new mines in Australia and Canada's Northwest Territories were not included in De Beers' distribution plan at the turn of the millennium.
    • When suddenly large quantities of diamonds were discovered in South Africa at the turn of the previous century, they were in short supply.
    • As a result of the Great Depression, diamonds had lost some of their lustrs at the time.
    • Diamonds are no longer as scarce as they once were because mines can be discovered in countries like Canada, Botswana, and Russia (via mining).
    • Diamonds, not rubies, emeralds, or sapphires, are the most frequent precious stones, according to TrueFacet.
    • Because of this, coloured stones such as rubies, emeralds, and sapphires can fetch higher prices than diamonds.
    • The fact that a diamond is naturally coloured (or "fancy coloured") also has a significant role in the diamond's price.
    • Fancy-coloured stones are much more scarce than white, colourless diamonds.
    • According to the DMIA, fancy-coloured diamonds only account for about 0.1% of all diamonds mined.
    • Diamonds of all colours, from the most common yellow to the rarest red, are so uncommon that they are sold uncut and at exorbitant prices, making them out of reach for most people in the market for jewellery.
    • There's a severe shortage of fancy-coloured diamonds (such as yellow or rose pink).
    • Diamonds have always been extremely rare.
    • The stone's increased value was due to its rarity.
    • De Beers stepped in immediately, brought up the mine, and kept tight control of the global diamond supply to prevent an oversaturation of the market.
    • De Beers only supplied enough diamonds each year to meet consumer demand.
    • As part of their marketing push, De Beers began emphasising the importance of diamonds in engagement rings.
    • Demand for diamond engagement rings skyrocketed, pushing away the traditional choice of rubies and sapphires.
    • The price of diamonds rose as demand reached a fever pitch, and supply was restricted by industry powerhouse De Beers.
    • Diamonds have been worn as a badge of honour by the world's nobility for ages.
    • Diamond engagement rings are just another example of how Millennials are interested in something other than following customs simply because they have always been followed.
    • As many millennials have no plans to get married, there is no point in buying an engagement ring.
    • Millennials are contributing to a shift in the diamond-buying tradition, especially when one considers the economic, ethical, and personal motivations for not getting married.
    • And since we're not in the diamond business, we can find you the lowest price on a diamond anywhere, online or off.
    • Diamond prices are affected by some factors, including the following: Diamonds are not uncommon.
    • This is the price range in which a one-carat diamond will sell depending on its cut, colour, clarity, and carat weight.
    • There are diamonds worth millions of dollars, yet the average diamond found in jewellery will set you back hundreds or thousands.
    • Consider the following examples of the world's most expensive diamonds: Cullinan I and Cullinan II: The original diamond was 3,106 carats, but it was sliced into two stones weighing 530.2 and 317.4 carats.
    • The diamond has earned its reputation over the years as the pinnacle of romantic gestures.
    • Diamonds have been associated with love and mythology ever since they were discovered.

    Frequently Asked Questions

    Diamonds can range greatly in price. A diamond's worth is determined by some characteristics, such as its size, quality, colour, and clarity. Smaller diamonds or diamonds with lesser quality grades would be less expensive. In addition, lab-grown diamonds are typically less expensive than mined diamonds because they are produced artificially in a lab.

     

    Diamonds, like every other commodity, are susceptible to depreciation. As a result, diamond prices are susceptible to shifts in supply and demand and currency exchange rates. In addition, the value of a diamond may decrease with time if it is flawed, poorly cut, or of a lower quality grade.

     

    Diamonds are only sometimes an excellent investment. While high-quality diamonds can gain in value over time, the diamond market is volatile and prone to supply and demand swings. Furthermore, because diamonds are so expensive, they are not a liquid asset and can be difficult to sell fast. As a result of these factors, many financial experts advise against investing in diamonds as a major investment strategy.

     

    Diamonds have always been prized for their beauty, durability, and symbolic significance. Diamonds are so tough that only another diamond can scratch their surface; they are composed of nearly 100% carbon atoms.

     

    Diamonds have a far higher price tag than gold. On the other hand, red diamonds are only found very infrequently on our planet. Only thirty are known to exist at this time, and the vast majority of them do not exceed a weight of half a carat (about 0.1 grams).

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