Are diamonds rare?

[billyboo]

Hey all, sort of new here. I was speaking with a gemologist friend of mine last week and he was telling me that diamonds are not really that rare. He said they are actually one of the more common gemstones but they withhold them or something to make them seem rare. Is this true? He said many other gemstones are in fact much more rare. I was always under the impression diamonds were rare thats why they cost so much. He said the russian vaults held mountains of diamonds just vast amounts and the places in South Africa and London also have more diamonds than you can imagine. Was wondering if this was true or not? I don't really know squat about cut diamonds but know a decent amount about colored stones and minerals. Thanks
BillI

 

[DeeNogger]

My understanding is that your friend is somewhat correct but not entirely. From what I heard, and again, this may not be correct so take it with a grain of salt, is that its not a matter of withholding the already mined diamonds but a matter of mining at a controlled rate so the number of new diamonds mined each year is held at some lower-than-could-be value. Basically they are tweaking the supply and demand curve. If the demand for diamonds is a set value year in and year out then decreasing the supply will cause a price inflation. By mining slower/less than actually possible, the supply is kept limited.

As far as huge vaults of diamonds being help from the public in order to make people pay more for diamonds, that sounds more like conspiracy theory rather than actual fact.

 

[billyboo]

Thanks for your reply. I was just reading some things on the net and one site said in London De Beers holds huge stockplies of diamonds in some "secretly" guarded basement. It said "although the amount is a tightly guarded secret experts estimate the number could be well above 20 millon carats[gem]"

I also found this
" To be sure, until the late nineteenth century, diamonds were truly rare, found mainly in a few riverbeds in India and South America, and the entire world production of gem diamonds amounted to a few pounds a year. Then in 1870, huge diamond mines called “pipes”
because of their circular shape were discovered in South Africa, where
diamonds were soon being scooped out by the ton by steam shovels. As
these diamonds poured onto the market, the price dropped to loss than
$10 a carat, endangering the investments in these mines. "

and "According to http://www-1.gsb.columbia.edu/journals/files/chazen/Global_Diamond_Industry.pdf, which claims to be quoting the Economist, 2000:
At the beginning of 1999, De Beers had a stockpile of diamonds worth $4.8 billion"

Not much on russian vaults but I did find this on Commodity Online
This was 2009
"Commodity Online
SURAT/MOSCOW: Diamond polishing units in Surat should now look to Russia for the movements of prices instead of watching De Beers.

Till now De Beers has been the market ruler as far as diamonds are concerned. That monopoly has been broken by Russia by stockpiling huge quantity of diamonds in its state-owned company.

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According to a report appeared in New York Times this week, Russia has surpassed De Beers as the world’s largest diamond producer.

The reason for this is recession. Following the slump, state-owned Alrosa diamond company of Russia has been keeping all its diamonds in its vaults, not selling a single piece.

This is a tactics used by China also as far as metals are concerned. China had adopted a secret policy to stockpile metals like copper and gold during recession and increase its stocks. In that way China has been using the prices crash to its benefit."

 

[stone-cold11]

Does not mean a thing when you compare to the world wide production amount.

The worldwide diamond production is at about 150m carats per year, nearly all of that industrial grade. 900k is roughly 2 days worth and this too is nearly all industrial goods. This is barely a blip on the radar. I think this is an example of the news people and the blogosphere trying to make a story where none really exists.

From this thread https://www.pricescope.com/communit...-zimbabwes-900-000-carat-sale-8-11-10.148423/

Stockpiling is also stupid by the companies involved as most govt tax you once the stones are dig out not when the stones are sold, so you are paying to keep the stones in a vault, better to reduce production and left it in the ground until the demand is there, which is what you see during this recession where many less productive mines are close down temporary.

 

[LGK]

I don't think diamonds are particularly rare, no- I believe their price is based on a brilliant marketing strategy and on the high demand for them, and their historic value. Think about it- you see a diamond of some size or another on the hand of just about every married woman in the US. That's a lot of people, and a lot of diamonds. You don't see, say, sunstones on every woman's finger. They are more of a rarity and indeed only come from one location (Oregon).

Price isn't based only on rarity though. It's based on demand. And if every woman wants a diamond when she gets married, well, again- that's one *heck* of a demand. Girls aren't told they need a sunstone to get married. So sunstones are in much less demand, and thus less expensive.

Correct me if I'm wrong here...

 

[starryeyed]

...He said the russian vaults held mountains of diamonds just vast amounts and the places in South Africa and London also have more diamonds than you can imagine....
BillI

I want to go to that mountain of diamonds, sit on top, throw them in the air, and let them rain down all around me. I want to get them stuck all over me so I trail diamonds wherever I walk. I want to sleep on top of the pile. I'd want to have all of my meals delivered. That would be quite a place!

 

[kenny]

Diamonds are not rare in our house.

 

[Doc_1]

...He said the russian vaults held mountains of diamonds just vast amounts and the places in South Africa and London also have more diamonds than you can imagine....
BillI

I want to go to that mountain of diamonds, sit on top, throw them in the air, and let them rain down all around me. I want to get them stuck all over me so I trail diamonds wherever I walk. I want to sleep on top of the pile. I'd want to have all of my meals delivered. That would be quite a place!

Just try not to get them in the meal, that will cause bowel obstruction....lol, JK

 

[Garry H (Cut Nut)]

...He said the russian vaults held mountains of diamonds just vast amounts and the places in South Africa and London also have more diamonds than you can imagine....
BillI

I want to go to that mountain of diamonds, sit on top, throw them in the air, and let them rain down all around me. I want to get them stuck all over me so I trail diamonds wherever I walk. I want to sleep on top of the pile. I'd want to have all of my meals delivered. That would be quite a place!

Just try not to get them in the meal, that will cause bowel obstruction....lol, JK

I thought it would be the ultimate ruffage?

There are quite probably more diamonds mined and on fingers and in safes now than there are under the ground.

The thing that makes diamonds expensive is not rarity - it is demand. Demantoid garnet is rare, but not everyone wants to wear one, and they are soft and fragile.
Gold is not rare, but because the price is high now there is almost as much jewellery being melted as made and sold.
If the same thing happened with diamonds - i.e. huge price rises - then there will be more secondhand diamonds sold back into the market.
If every one sold and no one bought then most mines would close (as happened last year in the gFC response) and diamonds would then be rare. Not likely but!

 

[billyboo]

Thanks everyone Although not really rare, due to demand and marketing thats why the prices are so high. Makes sense. Simple Economics 101.

 

[digitaldevo]

Simply put, NO, they are anything but rare! Now, a truly flawless and colorless diamond? Not exactly common. Naturally fancy colored diamonds? Again, really not common. So, while your normal "common" diamond is just that, quite common, but there are the aforementioned exceptions to that.

Heck, a Merelani Mint Garnet from Merelani is far more rare then a diamond. In fact, most colored gemstones are far more rare then a diamond! Aforementioned exceptions still apply for the most part.

DeBeers just did a great job with marketing and propaganda over the decades! And now marketing keeps them at the ridiculous prices they are at! Are they truly worth what they cost? Not in my educated opinion, no! But it doesn't matter what something should be worth, or even is worth on paper, it is what the market place will pay for it that sets its value, and sadly, most people will still sell of their first born children for a nice diamond, .

 

[missydebby]

I'm gonna come at this from a different angle. I know the conversation is " are diamonds rare?" and that of course leads to "are they worth the price?".

Now, this might be a paging Dr Freud moment, but I happen to like my expensive rock on my finger. I get a kind of unmitigated joy from having something expensive and useless except for it's beauty. I love how it's look is so so different than other gemstones. The reflections, the icy-ness, the sparkle, the shape, the facets... for me it's like no other gem. Maybe it's the marketing, maybe it's the cultural significance, but when I finally got this beautiful stone in it's beautiful setting on my finger, I found myself walking a little livelier in my step.

One thing sorta irritates me though, with the conversation of "are diamonds worth it"?

(OP, I'm not referring to you... just the issue in general )

There seems to me a little unsaid implication that diamond buyers are easily manipulated fools. And yes, maybe some are. If one is not educated, it is easy to spend a lot of money on a diamond that is poorly cut and included. On the other hand, can't that be said of so many things? The first thing that comes to mind of something pricey that people were manipulated into paying way too much for is Housing. Yes I know people need shelter, but how many people with stars in their eyes were manipulated by "The American Dream" to buy way more house than they could afford? How bout cars? How about artwork? How about watches? How about a nice cashmere sweater versus homespun? Now, obviously, what can be argued is the main difference between a diamond and these other things I mentioned is that the diamond is useless: houses you can live in, cars get you places, artwork decorates, watches tell time, a sweater keeps you warm. But the diamond? "It just sits there looking ostentatious!" proclaim many. But you know what? That's what I love about it. For me, it exists and is awesome just because it it beautiful. It doesn't have to feed me, or house me, or prove itself. All it needs to do is reflect a little of the world's beautiful colors to my eye to give me every cent worth of satisfaction.

*Rant Over*

 

[oldminer]

Some diamonds, such as natural pink and natural blue diamonds are few and far between and bring considerable market value with very limited need to promote them. Yellow diamonds, once rather rare as little as 25 years ago now are very much more available, marketed better and still reasonably costly due to scarcity of top colors and demand. The vast number of near colorless diamonds for use in jewelry are not really rare and their value is more supply-demand balanced by marketing gurus, minesw and dealers who all have done their part in keeping the prices stratified by grading, weight, shape and cut. Among folks who have a sufficient budget, there is little demand for which one cannot find a supply. It may take a few days or a few weeks for a particular weight, size and shape to appear for a consumer in a large, fine stone, but it will appear and satisfy their demand within a reasonable period of time. For regular folks, there is no waiting line. Bring your money and get the diamond you want, now.

Shoppers seeking bargains are the reason so many people find the supply of diamonds more scarce. Paying a few percent extra would free up a vast oversupply of most regular diamonds, but shopping well makes finding the few stones priced at the bottom a much more difficult challenge. Once a shopper has a handle on cut quality, the supply at the bottom end of price gets even more difficult. That's the real rarity, a fine quality for a super price.

 

[Doc_1]

...He said the russian vaults held mountains of diamonds just vast amounts and the places in South Africa and London also have more diamonds than you can imagine....
BillI

I want to go to that mountain of diamonds, sit on top, throw them in the air, and let them rain down all around me. I want to get them stuck all over me so I trail diamonds wherever I walk. I want to sleep on top of the pile. I'd want to have all of my meals delivered. That would be quite a place!

Just try not to get them in the meal, that will cause bowel obstruction....lol, JK

I thought it would be the ultimate ruffage?

There are quite probably more diamonds mined and on fingers and in safes now than there are under the ground.

The thing that makes diamonds expensive is not rarity - it is demand. Demantoid garnet is rare, but not everyone wants to wear one, and they are soft and fragile.
Gold is not rare, but because the price is high now there is almost as much jewellery being melted as made and sold.
If the same thing happened with diamonds - i.e. huge price rises - then there will be more secondhand diamonds sold back into the market.
If every one sold and no one bought then most mines would close (as happened last year in the gFC response) and diamonds would then be rare. Not likely but!

It is cheap and not high whatsoever!

 

[stone-cold11]

It is cheap and not high whatsoever!

Not sure where you get that from.

http://www.kitco.com/charts/livegold.html

Compared to 10 years ago, that is a 5 times increase in price for gold.

 

[Doc_1]

I'm gonna come at this from a different angle. I know the conversation is " are diamonds rare?" and that of course leads to "are they worth the price?".

Now, this might be a paging Dr Freud moment, but I happen to like my expensive rock on my finger. I get a kind of unmitigated joy from having something expensive and useless except for it's beauty. I love how it's look is so so different than other gemstones. The reflections, the icy-ness, the sparkle, the shape, the facets... for me it's like no other gem. Maybe it's the marketing, maybe it's the cultural significance, but when I finally got this beautiful stone in it's beautiful setting on my finger, I found myself walking a little livelier in my step.

One thing sorta irritates me though, with the conversation of "are diamonds worth it"?

(OP, I'm not referring to you... just the issue in general )

There seems to me a little unsaid implication that diamond buyers are easily manipulated fools. And yes, maybe some are. If one is not educated, it is easy to spend a lot of money on a diamond that is poorly cut and included. On the other hand, can't that be said of so many things? The first thing that comes to mind of something pricey that people were manipulated into paying way too much for is Housing. Yes I know people need shelter, but how many people with stars in their eyes were manipulated by "The American Dream" to buy way more house than they could afford? How bout cars? How about artwork? How about watches? How about a nice cashmere sweater versus homespun? Now, obviously, what can be argued is the main difference between a diamond and these other things I mentioned is that the diamond is useless: houses you can live in, cars get you places, artwork decorates, watches tell time, a sweater keeps you warm. But the diamond? "It just sits there looking ostentatious!" proclaim many. But you know what? That's what I love about it. For me, it exists and is awesome just because it it beautiful. It doesn't have to feed me, or house me, or prove itself. All it needs to do is reflect a little of the world's beautiful colors to my eye to give me every cent worth of satisfaction.

*Rant Over*

I am not convinced with diamonds at all, the only reason i got one is my wife wants it...LOL
that goes into the saying as long as there is one lady left on earth diamonds will still have value. That is respected wish though and that is why most of us men buy them, we want to please our beloved ones.
actually the diamond is not an investment, so if someone is looking at it from that angle is making a huge mistake, it is what it is a sparkly thing with a magnificent light show. if you are looking for a store of value buy silver and gold, if you are looking for an investment buy land they do not make more of it.

 

[Doc_1]

It is cheap and not high whatsoever!

Not sure where you get that from.

http://www.kitco.com/charts/livegold.html

Compared to 10 years ago, that is a 5 times increase in price for gold.

Redo your math and revisit what you know.
factor in inflation you will find it is cheaper now than 10 years ago.

 

[stone-cold11]

Ya right. So you are saying the US dollar devalued over 5 times since 2000?

So you paid a quarter for a hamburger in 2000? I don't remember that.

 

[denverappraiser]

if you are looking for a store of value buy silver and gold, if you are looking for an investment buy land they do not make more of it.

A lot of people have been burned by 'investing' in real estate lately as well. Although it's true that there is a limited amount of land in the world, that limit is really quite large and the differential between cheap land and expensive land is both enormous and flexible. That is to say, land that seems cheap one day (ex. open desert around Las Vegas in the 1950's) turns out to be expensive later and land that's expensive (ex. downtown Detroit Michigan) may turn out to be a lot less valuable than you thought. Boomtowns and Ghosttowns are both plentiful and they appear and disappear regularly. As Garry pointed out above, it's DEMAND that's driving the formula, not supply. In the case of diamonds, it's correct that there are quite a few other minerals that are a far site more scarce and that are available for a lot less money but, like land, cheap diamonds are actually pretty darned inexpensive while expensive ones can show prices that are truly mind boggling.

 

[Doc_1]

if you are looking for a store of value buy silver and gold, if you are looking for an investment buy land they do not make more of it.

A lot of people have been burned by 'investing' in real estate lately as well. Although it's true that there is a limited amount of land in the world, that limit is really quite large and the differential between cheap land and expensive land is both enormous and flexible. That is to say, land that seems cheap one day (ex. open desert around Las Vegas in the 1950's) turns out to be expensive later and land that's expensive (ex. downtown Detroit Michigan) may turn out to be a lot less valuable than you thought. Boomtowns and Ghosttowns are both plentiful. As Garry pointed out above, it's DEMAND that's driving the formula, not supply. In the case of diamonds, it's correct that there are quite a few other minerals that are a far site more scarce and that are available for a lot less money but, like land, cheap diamonds are actually pretty darned inexpensive while expensive ones can show prices that are truly mind boggling.

I did not say in US.
you do not own in US you only rent. if you do not pay property tax they will throw you out of your property and sell it in a public auction even if you pay in full and you have the deed cleared from any lien holder.
The reason can be debated but it is not the place for it here but we can debate at wish.

 

[Doc_1]

Ya right. So you are saying the US dollar devalued over 5 times since 2000?

So you paid a quarter for a hamburger in 2000? I don't remember that.

How many dollars have been printed since 2000, and how much debt we accumulated since then, how much your gas, heating, electricity, medical bills, insurance, groceries .........etc had went up since then.
Looking at burgers as an indicator for inflation is a guarantee to lose wealth...lol
as i said redo the math.

 

[stone-cold11]

Was 1 gallon gas sold at 2 quarters in 2000?

Was inflation ever more than 10% per annum? Inflation is calculated for all products and services, at no time in the past 10 years was there an inflation of more than 10% per annum, so do not even think about a sustained above 10% inflation over 10 years.

If not all your proposition only works if US dollars goes through a massive devaluation now!

You do the calculation to support you case then.

 

[Doc_1]

Was inflation ever more than 10%?

All your proposition only works if US dollars goes through a massive devaluation.

You do the calculation to support you case then.

If you stack a dollar above a dollar and you lay that stack flat on the ground and you park the car at the level of the first dollar then you turn your engine and drive, at the mark of 73 mile there is the trillion dollar, do you know how many trillions we accumulated in debt including the unfunded liabilities, and how much they printed and expanded their money base since 2000 to slash the debt only at the expense of the value of the dollar, if that is not devaluing of the dollar i do not know what is!!!

Oh by the way did you hear about the hockey stick term on the exponential curves?

 

[stone-cold11]

The dollar is still keeping it's value because the US govt and the world has not lost faith in the value. Not the same as inflation, do not mix up the 2 and tries to make it the same.

 

[Doc_1]

The dollar is still keeping it's value because the US govt and the world has not lost faith in the value. Not the same as inflation, do not mix up the 2 and tries to make it the same.

Is that why China our major creditor is dumping their holding of dollars on Africa mines?

 

[stone-cold11]

So?

Is the US dollars devalued now? This instant by 500%? If it devalued now by 500%, the price of gold will go up by 500% because it is traded in US dollars.

 

[Doc_1]

So?

Is the US dollars devalued now? This instant by 500%? If it devalued now by 500%, the price of gold will go up by 500% because it is traded in US dollars.

Not when the continued devaluing of the dollar leads to loss of confidence and collapse, when the music stops and interest rate goes up then we cannot even roll our debt or even service it. Then gold is viewed as money and not commodity and the top of gold when it comes will lit your hair on fire.
As i said redo your math, you are looking at hamburgers, you need to see the bigger picture.

 

[stone-cold11]

So you do the math to support your case.

 

[Doc_1]

So you do the math to support your case.

Ah
I lose another argument.
Keep your eyes on the burgers

 

[stone-cold11]

Ya, so you can't even form a case, with calculation based on actual data, to support you own baseless assumption on the value of gold and expects others to do the calculation base on your assumptions.

I guess this is what you call smart in your part of the world.