Treasured gemstones since the ancient times
Diamonds have been treasured as gemstones since the ancient times. The popularity of diamonds has risen since the 19th century because of
successful advertising in spite of a greatly increased supply. They are not normally used as a mainline store of value during times of crisis, due to their
lack of fungibility and low liquidity, but may still be useful during times of hyperinflation. Nearly 20% of mined diamonds are used in jewelry and 80%
for industrial uses such as lasers, drill parts and surgical equipment.
Wholesale diamond price has been controlled by the De Beers Group, which has an estimated 40% to 50% of the market. Botswana is currently the
largest producer of diamonds with mines operated by Debswana, a joint venture between De Beers and the Botswana government, however, since the
1980s, other producers have developed new mines in Russia, Canada and Australia challenging De Beers' dominance. The United States is the
biggest consumer of diamonds in the world. The U.S. accounts for 35% of diamond sales, Hong Kong 26%, Belgium 15%, Japan 6%, and Israel 4%.
The price of diamonds fluctuates with global demand and the world economy.
Diamond prices may vary widely depending on a diamond's carat, color, clarity and cut, what we call the four Câ€™s factor, although there is no
universal world price per gram for diamonds. Numerous institutions have varying standards which can be used to aid in diamond identification and
pricing. Gemological Institute of America, American Gemological Society and International Gemological Institute are three such institutions. Some
firms offer "investment-grade" diamonds for sale to the public. A prudent investor should ask for a written promise to rebuy the diamonds at or near the
purchase price within a specified period. Diamonds may thus be considered as a problematic investment, as it may be easy to buy a diamond, but it is
not easy to sell one unless one is already an established diamond merchant.
Another problem for an investo