The U.S. is yet to face another recession in 2023 and it is highly expected. There is currently inflation all around the globe and according to THE WORLD BANK, as central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging toward a global recession in 2023 and a string of financial crises in emerging market and developing economies that would do them lasting harm. What is the state of diamond during a recession?
Sales of luxury goods like diamond rings, expensive watches, and jewelry appear to rise during times of economic gloom, which at first appears counterintuitive. Think again if you believe that during the pandemic, individuals would be the last to get jewelry and other expensive objects. Despite the fact that many stores were forced to close due to the epidemic, those with the means continue to be in high demand for jewelry.
What Depicts Diamond from Recession?
In the last 50 years, diamonds have retained their values, unlike dollars. In the past fifty years, the value of the dollar has decreased by 86%, according to a Finbold piece from earlier this year. Diamonds, though, can’t be considered to be the same. The historical wholesale price of one-carat D-colored diamonds slowly increased to ten times its dollar worth between 1960 and 2011 in a fifty-year trend spanning the majority of the same time period. Although there has been much discussion regarding the relative abundance of diamonds, a gem-quality loose diamond requires a lot of labor.
The greatest quality diamonds from the most renowned dealers do fetch a high price and keep that price very well even through times of economic downturn, taking the 4 C’s (color, clarity, cut, and carat weight) into account in the diamond valuation.
What Carat is the Best to Invest in?
Around June 2011, diamond prices reached their peak. However, diamonds weighing one carat and higher have remained durable, unlike those with carat values less than 1.0 ct. PriceScope.com’s pricing trend indicates that after a brief decline during the pandemic, the prices of larger-carat diamonds will break previous price records by March 2022. These particular sets of diamond sizes are driven, in part, by their relative rarity as well as the constant desire for such items, regardless of economic conditions.
Buy from Reputable Brands
Buying diamonds from reputable brands also affects their value of it. Branded hard luxury goods maintain their worth mostly due to their reputation for exclusivity. Bova Diamond, for instance, is one of the reputable Dallas jewelry sellers, we are highly known for our cheapest yet high-quality loose diamonds. We can assure you that you will get the most affordable diamonds around Dallas. That can ensure that your diamond during a recession is safe.
It is highly advisable to invest in diamonds during a recession because they always retain their value. Prices of commodities typically fall during a recession. The reverse response seems to apply to diamonds. The cost of the yellow Vivid diamonds has increased by a factor of two. To give you an idea, the “Graff Vivid Yellow” diamond was sold at Sotheby’s in 2015 for no less than 16 million USD. The purchase of loose diamonds is a wise investment!
More and more people have the chance to start investing thanks to the expanding middle class around the world. Brazil, Russia, India, and China did not experience the same financial crises that the West did. As investors, they started purchasing loose diamonds, which caused the price of diamonds to keep rising. Additionally, several of the biggest diamond mines in the world closed, making it more difficult to find pricey stones. However, there was a tiny lack of loose diamonds available for purchase. This aspect also helps to maintain and increase the investment diamond’s value. People realized that buying loose diamonds makes sense as a long-term investment.