Are diamonds as rare as we think they are? Ever tried to re-sell a diamond?
The fact of the matter is, the value of an earth-mined diamond has been fueled by slick advertising campaigns and a carefully controlled supply chain.
There is no question that the beauty of a diamond is rare. The thought that they are so rare, that demand far surpasses supply, thereby justifying higher value and prices is merely a mirage. The history of the tightly controled supply chain is well-established. Check out the links on our research page to learn more.
Some industry leaders like Rapaport, a major trade source for diamond prices, are working towards standardization that would bring transparency to the pricing of diamonds. The diamond jewelry trade is fairly unified in claiming that this cannot be accomplished. Taking an adamant stance that diamonds cannot be considered a commodity, while by most definitions they can, the trade insists that each diamond is too unique* and that standardization cannot account for the diamonds symbolic value of "enduring love and commitment" (which they believe, since they spent millions in advertising to convince consumers it's true). The implied thought is that diamonds are nearly priceless and that their value would not hold should they be traded as a commodity. Anyone who's seen the price of gold, knows that commodoties can still be valuable while being transparent in their pricing and at the same time offer resale value to the buyer. Under that scenario the value does not remain solely in the hands of the suppliers, but also now benefits the buyer who garners some resale value---oh wait, maybe that's not the intended outcome.
Symbols of love are meaningful, however, as consumers our emotions should not blind us. A recent class action law-suit ruling testifies to the misleading advertising and unfair pricing that marks the diamond trade. www.diamondsclassaction.com
Could any metrics for determining a diamond's value account for impact on the environment, unequitably compensated diamond mining communities, or the tragedies supported by conflict diamonds that continue to find their way into the supplychain? Only you can determine what value you will place on a symbol of commitment, but you must ask yourself "at what cost?"
*Often referring to the "4 C's" - color, cut, clarity, and carat. Which are considered to be the standards by which consumers can make a fair purchase. Polish and symmetry are also important attributes of a diamond, but are not often attributes marketed to the average consumer. The fifth "C" is marketed by companies selling conflict-free diamonds. Leaving the environment and economic attributes, as described by The Greener Diamond's definition of a conflict diamond, unaccounted for.
Source: http://www.marketwatch.com/News/Story/Story.aspx
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