Diamond, Valentine’s Day, Nosi Mzamo, value, investment, luxury, market, demand, mine CEO of Diamond State Trader, Nosi Mzamo
This Valentine’s Day, many women may receive a stunning diamond as a gift. Be it a ring, necklace, or earrings. But beyond its sparkle, how well do they understand its real worth?
Just as high-end brands are recognised as investment pieces, diamonds hold a unique position as both a symbol of love and a strategic asset.
Diamonds are often seen as symbols of love, but how should consumers view them from an investment standpoint, especially with the rise of lab-grown alternatives? Nosi notes that diamonds have been a symbol of unwavering love for centuries. “People often choose natural diamonds because of their inherent rarity, perceived higher resale value, historical tradition, and the sentimental value associated with a gemstone formed naturally over millions of years, making them considered more exclusive and potentially a better investment. Each natural diamond is unique from the other and rare,” she affirms.
Glamour: Can you shed light on how natural diamonds have evolved over the years, and why they continue to hold value as rare, unique assets in today’s market?
Nosi: Natural diamonds are the Earth’s real treasures, exceptionally rare, and are mined today in a responsible way that supports livelihoods and contributes to conservation efforts around the world. The natural diamond industry has generated significant economic contributions to many developing nations that are diamond producing countries. The natural diamond industry supports the livelihoods of 10 million people across the world who are involved in the diamond supply chain.
Glamour: With more consumers opting for lab-grown diamonds, do you think the demand for natural diamonds will continue to rise, or will lab-grown alternatives shift the market’s focus?
Nosi: Diamonds have always been more than just luxury items; they are symbols of wealth, achievement, and love. However, beyond their emotional and aesthetic appeal, diamonds continue to appreciate in value, making them an attractive investment. Here’s why:
Rarity
Diamonds are naturally rare, formed deep in the Earth under extreme conditions. As mining becomes more difficult and expensive, the supply of high-quality diamonds is shrinking. This scarcity drives up their value, making them a reliable investment.
Growing Demand
Emerging markets like China and India have experienced economic growth, leading to an increase in disposable income. As a result, more people are purchasing diamonds, not just for engagements but also as gifts and milestones. The rising demand helps sustain their value.
Emotional Significance
Diamonds are often tied to life’s most important moments, such as engagements and weddings. This emotional value makes them even more desirable. People are willing to pay more for a diamond that carries personal meaning, ensuring their long-term worth.
Glamour: What are the key factors that determine the true value of a diamond? How can consumers assess this value before making an investment?
Nosi: The resale value of all Diamonds is calculated by a mixture of ranking the quality via the four C’s (cut, clarity, carat and colour) and also, the public and market demand for Diamonds. Consumers need to ensure that they receive a diamond certificate when purchasing their diamonds that is attesting the stone’s authenticity and quality attributes such as cut, colour, carat weight, and clarity grade. It also provides an estimated value based off of the current market prices for those characteristics.
Glamour: While most people have heard of the “4 Cs” (Cut, Color, Clarity, and Carat), what should consumers really pay attention to when evaluating a diamond for both beauty and investment potential?
Nosi: There are many different organisations that offer diamond certifications; however, not all are created equal. The Gemological Institute of America (GIA) is widely considered to be one of the most authoritative sources in gemology due to its strict standards and rigorous evaluation process. An independent laboratory issues GIA certificates after extensive testing which includes microscopic inspection and X-ray analysis. These thorough assessments allow them to provide accurate information regarding the diamonds’ true worth.
Glamour: How has the diamond industry evolved in recent years, and what trends should consumers be aware of when making a purchase for both love and long-term value?
Nosi: In recent years, the diamond industry has undergone significant changes, which has increased consumer choice and impacted pricing, while also pushing the natural diamond market to focus on greater transparency and sustainability practices when sourcing and selling diamonds; consumers should be aware of these factors when buying diamonds, considering both the sentimental value and potential long-term resale value of their purchase, including the origin and ethical sourcing of the stone.
Glamour: With lab-grown diamonds becoming more prevalent, do you believe they will ever rival natural diamonds in terms of investment value?
Nosi: It is highly unlikely they will ever fully rival natural diamonds in terms of pure investment value. As the inherent scarcity of naturally mined diamonds is a key factor driving their price and perceived investment potential
Glamour: What advice would you give consumers looking to make an informed decision about purchasing a diamond as both a token of affection and a valuable investment?
Nosi: With endless choices and numerous factors, knowing what to prioritize is crucial. The right diamond is not just beautiful; it represents a commitment, a celebration, or even an investment.
One common mistake many people make during diamond shopping is focusing solely on the size or price. However, a diamond’s brilliance, clarity, and cut have a tremendous impact on its overall appearance and value. Balancing these aspects, while remaining mindful of your budget, will lead you to a piece worthy of admiration.
Glamour: Are there any emerging markets or shifts in the diamond industry that people should be paying attention to, especially in terms of value and rarity?
Nosi: As the industry navigates macro-economic challenges, the importance of environmental, social, and governance (ESG) considerations cannot be understated. Diamond mines are often integral to the economies of the communities in which they operate. The diamond industry as such finds itself at a crossroads, grappling with a complex web of market dynamics and external pressures. The current state of reduced prices and increased supply poses challenges, yet the industry's history of resilience and adaptation offers hope for the future.
Glamour: Sustainability Considerations: In today’s ethical landscape, how does the increasing emphasis on sustainable sourcing of natural diamonds impact their value and desirability as an investment?
Nosi: The natural diamond industry operates as a large and diversified ecosystem of organizations and communities. The natural diamond industry abides by numerous international human rights frameworks and labor regulations, alongside country-specific regulations and further rigorous ethical, social, and environmental requirements to ensure it does business in the ethical diamond industry in a responsible way.
The Kimberley Process, also known as the Kimberley Process Certification Scheme (KPCS), is a joint initiative between governments, diamond industry bodies and civil society, mandated by the United Nations and the World Trade Organization, to stem the flow of ‘Conflict Diamonds.’
This ‘tripartite composition’ of the Kimberley Process ensures its relevance and increases its impact. The Process, open to all countries, became operational in 2003 to control trade in rough diamonds between participating countries. The KPCS seeks to stop the illicit diamond trade and ensure that purchases of natural diamonds do not finance violence by armed movements and their allies seeking to undermine legitimate governments. It is a legal requirement that all rough diamond exports are accompanied by a government-validated Kimberley Process Certificate.
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