Are you stuck choosing between diamond or gold for investment purposes? That’s a common conundrum, but they’re actually two very different investment vehicles. While it’s true that they’re both tangible, rare commodities that are famous for their value and prestige, there are some very important distinctions you should keep in mind before proceeding with your investment.
As a precious metals dealer, it’s clear where we stand on the debate. However, our goal is to educate and inform so you can make a confident decision—even if you decide that diamonds are the better choice for you. We’re simply going to provide a straightforward analysis of gold vs. diamond investments, as we believe that the facts speak for themselves.
Here’s a look at the factors you should consider when choosing between the two assets.
Gold has been used as a currency and store of value since ancient times. For countless centuries, people have trusted gold because it continues to perform reliably, even rising in value during periods of economic downturn. Society has faith in gold. It has true, intrinsic worth, not only because of its rarity and beauty, but because of its many use cases.
Diamonds, however, have a much different history that should be considered when comparing gold vs. diamond investments. While they were certainly valued in ancient times, they were reserved for royalty. Over the centuries, they have maintained that elite status. They have never been a dependable currency, and that fact remains true today.
When choosing between diamond or gold for investment reasons, you must recognize the De Beers company's impact on the value of diamonds. Diamonds grew significantly in popularity following De Beers’ post-war marketing campaign that pushed diamonds as the quintessential symbol of love. Today, the value of diamonds is still heavily influenced by emotion.
Research current and future market conditions as you analyze gold vs. diamond investments. While it’s true that earth-mined diamonds are rare, finite materials, lab-created diamonds (and diamond alternatives) are quickly causing them to lose their prestige.
Lab-grown diamonds are identical to earth-mined diamonds in every way, with the only difference being their origin. They’re chemically, optically, and physically the same as their mined equivalents. Naturally, the increased availability of lab-grown diamonds will impact the demand for mined diamonds. This, in turn, will affect their value.
In contrast, gold cannot be synthesized in a lab. There’s no risk of your gold investment being overshadowed by lab-grown metals. Consider supply and demand as you choose between gold vs. diamond investments. If a material can be created, is it really finite? With gold, you’re staking a claim on a metal with a limited supply and an ever-growing demand. The same cannot be said about diamonds.
When choosing between diamond or gold for investment purposes, you must also consider how the material’s value is determined. Diamonds are valued according to the 4Cs: carat, cut, clarity, and color. Like snowflakes, every single diamond is unique. Each one must be appraised to determine its worth, and that figure can vary widely depending on who you ask.
The value of gold is standardized. A major factor to keep in mind when weighing the differences between gold vs. diamond investments is the knowledge required to make an informed purchase. Are you confident in your ability to differentiate between a perfect diamond and a flawed one? Are you positive that an appraisal is accurate and will still be valid in a decade or more?
With gold, you know exactly what you’re buying. You know exactly how it’ll be valued 100 years from now. There’s no risk of finding out that you overpaid when it’s time to sell. You don’t need to rely on an appraisal (or multiple appraisals) to determine what your investment is worth. You simply purchase a certain amount of gold, and that’s that.
Similarly, you must consider liquidity when choosing between gold vs. diamond investments. After all, an investment's true value is only what you can sell it for in the future. This is one of the most critical factors that often goes overlooked when choosing between diamond or gold for investment purposes.
You’ll never have a problem selling your gold, should the need ever arise. And you know exactly how much fiat money you’ll receive in exchange. Finding a diamond buyer is significantly more difficult. Even if you can find an interested party, you’ll have to jump through hoops to get it appraised and settle on a fair price you both agree on.
A stark difference between gold vs. diamond investments is the risk involved in the liquidation process. If a gold buyer doesn’t give you a fair offer, you simply move along. Finding a reputable diamond buyer who will offer a fair price is much harder because there’s no standardized pricing system. Even if you go through an auction house to avoid shady buyers, you’ll end up paying steep fees.
Diamond prices are notoriously affected by corporate interests. It’s common for diamond monopolies to withhold supply and use marketing tactics to pump prices. While this can be beneficial if you’re fortunate enough to sell at the right time, buying at the wrong time is just as easy.
A major difference between gold vs. diamond investments is how markets can or cannot be manipulated. Again, the De Beers company proved beyond a shadow of a doubt that the price of diamonds can be heavily influenced by marketing campaigns that appeal to emotion. There’s a reason why a diamond ring is the wedding standard.
As you consider diamond or gold for investment reasons, you may wonder if gold’s price can be manipulated similarly. While economic and societal changes can certainly affect gold’s spot price, gold tends to increase in value during stormy economic weather and societal uncertainty. Gold is less susceptible to targeted market manipulation from corporate monopolies.
You should also consider industrial use cases when analyzing gold vs. diamond investing. Gold has unique properties that make it an irreplaceable metal in countless industries, including electronics, dentistry, medical, and aeronautics fields, among many others. While the hardness of diamonds makes them an excellent abrasive, it’s not as in demand as gold.
Although size and storage aren’t the most important factors, they’re still worth acknowledging. Diamonds are extremely small. It’s far easier to lose a diamond, and they’re much more likely to be stolen. A one-carat diamond is only 6.4mm in diameter and costs significantly more than one ounce of gold.
Simply put, you don’t have to worry about gold coins and gold bars falling into a floor crack and disappearing. As you look into gold vs. diamond investing, don’t forget to consider how you will store your investment, especially if you plan on holding long-term to secure your financial future or retirement.
Whether you’re interested in diamonds or gold for investment purposes, we encourage you to contact us for further guidance. Our in-house precious metals specialists will be happy to answer all your questions about investing in gold so you can move forward with absolute confidence.
We understand that every investor has their own personal preferences and financial goals. When it comes to gold vs. diamond investing, the first step is to figure out which approach most closely aligns with your needs. We’re here to provide unbiased information—how you choose to proceed is up to you.
If you decide to invest in gold, you’ll find a wide variety of high-quality gold products at highly competitive prices at Endeavor Metals. We provide a 7-day, 100% money-back guarantee, even if the gold market has a downturn. As a Tier 1 United States Mint bullion dealer with more than 50 years of in-house experience, you can depend on us to take care of you—every step of the way.
We’ve helped many customers choose between gold vs. diamond investing. Our commitment to excellence has earned Endeavor Metals a 4.9 Google star rating and an A+ accredited grade on the Better Business Bureau.
In addition to our stellar reputation in the community, we belong to numerous organizations, including the prestigious Silver Institute, the Industry Council for Tangible Assets, the American Numismatic Association, and the Certified Acceptance Corporation (CAC).
We hope this guide on choosing between diamond or gold for investment purposes has been helpful. If you have any questions, check out our FAQs, give us a call at 855.753.3575, or visit us in West Palm Beach. When it comes to gold vs. diamond investing, the facts say it all. Diversify into a time-tested store of value today.