Stocks and bonds have already been an excellent investment, but the recent recession and market instability have forced people to think about better and more secure alternatives.
In most cases, potential investors firstly think about diamonds and precious metals like gold. So, gold vs. diamond, that is the question. Let’s see what is worth more and which one is a better investment.
Gold vs. Diamonds
Both gold and diamonds have been safe investments during the previous half-century despite the poor economy.
Gold is a rare precious metal you can find in rocks. Scientists estimate that its average concentration in the Earth’s crust is low, only four parts per billion. There are two problems when you want to buy gold.
Firstly, its price has significantly fluctuated over the past ten years, so you need to be patient and wait for the right moment to re-sell it. Secondly, a policy of acquiring ownership on paper means that you won’t get real gold when purchasing.
Diamond is a highly pressurized carbon concentrated in the Earth’s crust with 200,000 parts per billion. Diamonds are not particularly rare stones, but there is more gold on Earth than large diamonds. Unlike gold, it is possible to create synthetic diamonds from graphite in a lab.
Unlike common diamonds, colored diamonds are rare, and their price is stable. You will get them in your hand after buying them, making them an excellent investment. However, they are often too expensive and unattainable for most people.
Gold vs. Diamond Prices
The global gold price upward and downward daily since it is directly linked to the economy. Therefore, its value depends on current global economic conditions or the dollar value.
An official world reference for gold prices is the London Gold Fixing. Four banks fix the reference gold value together twice a day, at 10:30 AM and 3 PM, following the ritual that has been unchanged since 1919.
The jeweler and goldsmith sectors demand almost 80% of the world’s gold supply. However, they rarely need pure 24K gold, so they mix it with silver, copper, nickel, iron, or aluminum to get jewelry.
When you want to calculate gold jewelry value, you will do it in karats or by its purity. Pure 24K gold is a soft metal you can’t use for making jewelry. Therefore, jewelers add some alloy to gold to increase its hardness and make it adequate for manipulating.
The final gold value will depend on the gold to metal ratio. Since one karat is equivalent to the 1/24th unit parts, you will know that 18K piece contains 18 pure gold units and six metal parts. On the other hand, jewelry made of 10K gold has only ten gold units mixed with 14 other metal parts.
Increased manufacturing of 9K and 14K alloys has significantly reduced the gold jewelry price and increased demand. As a result, production has doubled in the last 20 years.
Other large gold consumers are the construction industry and advanced technology that takes almost 10% of the gold supply available, affecting this precious metal price.
Diamonds price fluctuates significantly less than gold, making them a more stable investment. In most cases, their value continually increases over time.
Since dozens of factors determine diamond prices, it can be challenging to calculate these precious stones’ actual value. Rapaport index in New York sets diamond prices by establishing a weekly prices average listed in the Diamond Bourses. After that, diamond values are determined in dollars.
GIA certified diamonds prices
|Carat weight||Carat price||Total price||Recommended option|
|0.25||$800 to $4,000||$200 to $1,000||$400|
|0.5||$1,100 to $7,700||$550 to $3,850||$1,000|
|0.75||$1,800 to $8,800||$1,400 to $6,500||$2,500|
|1||$1,900 to $15,600||$1,900 to $15,600||$4,000|
|1.5||$3,000 to $22,000||$4,500 to $33,500||$9,500|
|2||$4,000 to $42,000||$8,000 to $85,000||$15,000|
|3||$6,500 to $60,000||$18,500 to $150,000||$41,000|
|4||$7,500 to $68,100||$30,300 to $270,000||$70,500|
|5||$8,500 to $70,500||$42,000 to $350,000||$105,000|
The crucial thing is to understand that diamond price is not the same as diamond worth. The vital parameter is the gem quality, or so-called 4C’s, including carat weight, color, cut, and clarity. So, be careful when choosing this gemstone since its price won’t follow the usual logic.
For instance, you need to pay $1,900 to $15,600 for 1 Carat GIA certified diamond. However, 2 Carat diamond prices will be $4,000 to $42,000 per Carat, so you will need to pay a huge $8,000 to $85,000 for a single stone.
Another thing you should be aware of is a diamond shape. These values I have mentioned are for a round diamond. If you look for less desirable diamond shapes, they will cost you approximately 20 to 40% less.
The final diamond price will also depend on GIA and AGS certifications that confirm you paid for the wanted quality. Plus, you need to consider a jewelry brand. The same quality gem will be more expensive when it comes from a famous jewelry store.
What Is Worth More?
Once you decide to invest your money in something valuable like gold and diamonds, the crucial question is, what of two worth more. In general, it depends on numerous factors.
First of all, you should know that no one can guarantee a set price for either option since it directly depends on the demand. The rule of thumb is that rarity is the primary indicator of worth. In other words, gold and diamond rarity will affect their perceived value.
It may surprise you, but diamonds are less rare than gold. However, high quality and sizable gems are uncommon, dictating their preciousness and higher value compared to gold.
On the other hand, the gold market could change significantly only if gold deposit concentration in the Earth’s crust would increase by at least 1,250 times.
The most expensive materials worldwide
|0||Jade stone||Unique item weighing 200 tons||$170,000,000|
|1||Antimatter||The opposite to matter||$62.5 trillion per gram|
|2||Californium||Chemical element||$25 to 27 million per gram|
|3||Diamonds||Precious stone||$55,000 per gram|
|4||Tritium||Gas||$30,000 per gram|
|5||Taaffeite||Rare precious stone||$20,000 per gram|
|6||Painite||Extremely rare mineral||$9,000 per gram|
|7||Plutonium||Heavy radioactive metal||$4,000 per gram|
|8||LSD||Psychoactive narcotic substance||$3,000 per gram|
|9||Cocaine||White crystal powder||$236 per gram|
|10||Heroin||Opiate||$130 per gram|
|11||Rhinoceros’s horn||Organic material||$110 per gram|
|12||Methamphetamine||Synthetic drug||$100 per gram|
|13||Platinum||Rare precious metal||$60 per gram|
|14||Rhodium||Rare metal||$58 per gram|
|15||Gold||Precious metal||$56 per gram|
|16||Saffron||Spice||$11 per gram|
Unlike diamonds, gold has been considered a currency in some countries for centuries, so it can worth more than diamonds in this sense. Even though its price constantly fluctuates, gold is a safe investment.
It has a reliable return and withstands inflation excellently, and its price increased almost 450% in the last ten years. However, gold is still relatively low ranking among the most expensive materials on the Earth and positioned at modest 15th place on the list of the first 17.
Be aware that diamonds can be more expensive or cheaper than gold, depending on the gold varieties available, their purity levels, and even gold reserves in the particular country. Diamonds’ resale value is almost always better, making them worth more.
However, that is true only when you invest in certified diamonds that rank well in all the required 4 C’s. Besides pure Californium and Antimatter, diamonds are the third most expensive material on the list.
Which is Better for Investment?
Commodity investing means that you purchase something with a plan to re-sell it when needed. It is a beneficial decision since commodities keep their value during economic uncertainty.
Gold and other precious metals’ value stays stable despite the volatile stock market, while it doesn’t apply to money in most cases. The only catch is to pay attention to current trends and gold currency rates.
Even though some commodities can be risky investments, the advantage of gold is that you can hold it on until picking out the moment to sell it and get an excellent return.
On the other hand, diamonds are not the most valuable precious gemstones, and they were practically worthless only 100 years ago. Basically, they owe its preciousness to the genius marketing strategy that makes people believe this stone is rare and the best option you can get for your money.
For example, gold you buy will worth almost the same whether you buy or sell it. The only difference is in the goldsmith’s commission. On the other hand, your fabulously expensive diamond engagement ring will lose about 80% of its value as soon as you step out of the jewelry store.
Nowadays, the value of investing in diamonds depends on their type, quality, mounting, and certification. When you decide to invest in gold, it is crucial to purchase actual, physical gold instead of gold on paper and with unencumbered ownership.
The current growing lack of confidence in official financial institutions forced people to change investment types. Buying gold and diamonds is an excellent solution to secure your savings. It’s up to you to choose one of these two options, depending on current trends, your preferences, and your budget.