The once steadfast and reliable commodity of gold is on the downslope for the first time in a long time. Since 2011, when gold hit an all time high of $1,900 an ounce, it has plummeted down by 30% (to $1,330/ounce), a profound low. This could possibly coincide with the fact that another precious material is seeing one of its first significant boosts in an equally lengthy period. That security is diamonds.
There are several concrete factors that could be drawing investors towards the sparkling assets, but a few intangibles as well. One of these being the fact that diamonds have never really had a “spot price” (a current price a commodity can be bought or sold at a specific time or place) or a rigid market; they are a more fluid and erratic commodity, with the only sure annual demand stemming from jewelers. The elastic nature of the diamond market can thus cause demand to fluctuate in an unpredictable manner. Continue reading Diamonds Outshining Gold as an Investment: The Eastern Explanation