6 Big Reasons Why Sapphires (and Not Diamonds) Are Your Secret Weapon Against An Inflation
Strap: Diamonds can be a risky investment during inflation. Sapphires, on the other hand, have a lot going for them.
- Introduction: Why buying diamonds could prove a loss for buyers, amid inflation (decline in value of the dollar, volatile markets etc)
- Why the durable sapphire is emerging as a better alternative for wholesale buyers or engagement ring shoppers
- Why diamonds have nothing to do with tradition (while sapphires have a storied legacy)
- Why diamond grading is subjected to the market (and how buyers should be wary of this)
- Why and how diamonds are a depreciative asset (why diamonds don’t hold their value but sapphires do)
- Why it’s harder to find ethical, sustainably produced diamonds during an inflation
- Sapphires are more meaningful than diamonds and thus more appealing to post-pandemic conscious buyers
Inflation is raging across the globe and experts claim it’s the highest it’s ever been. Financial experts worry that with Europe in the middle of a major conflict and China in the midst of a lockdown, things will only get worse for major players in the gemstone and mining sector.
To put it simply, buying a diamond engagement stone will cost you a lot more than it usually would. The decline in the value of the dollar has made investment harder. Moreover, buying a modest diamond (be it an engagement stone or something petite) is currently deemed a not-so-smart investment because prices of polished diamonds are likely to be volatile this year. This prediction comes on the heels of the economic fluctuations in the US market. So, unless you’re buying bigger or rarer diamonds, or stocking up on wholesale diamonds and buying in bulk, you’re at a loss.
For mid-level retail platforms and for commercial buyers, this is terrible news. Martin Rapaport, Chairman of The Rapaport Group, who also set up the world’s largest diamond trading network, RapNet, agrees with this sentiment. He recently confirmed that buying a diamond at the moment is simply not an appealing decision for middle-class buyers or retailers. “The U.S. middle-class jewellery buyer is toast – he doesn’t have the money, He is living off paychecks,” he said in an interview recently.
“The bubble is years away from bursting. Diamond prices are getting very high,” he added. But the diamond broker also confirmed that the demand for rare gemstones is booming and people are open to considering alternatives to diamonds. And what’s the best alternative for natural diamonds? Sapphires, of course!
The durable and dependable sapphires rank 9/10 on the hardness scale, which makes them an ideal engagement stone. But the gemstone’s biggest appeal is definitely its gorgeous and striking blue shade. Sapphires are corundum and exhibit a range of colours depending on what transition metal is present. In commodity-rich emerging markets like the Gulf, oil-producing South American countries etc, sapphires are experiencing a major demand.
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But sapphire’s versatility and overall appeal make it such a strong contender against diamonds, in an inflated market. Millennial buyers especially are prioritising traceability when it comes to investment stones and bridal jewellery. Sapphires are easier to trace back to their origins, especially if you’re working with a trusted source. A premium-quality, precision-cut Australian teal sapphire, for instance, would be a smarter purchase than a diamond, at the moment. Because of the natural price of the sapphire, the sapphire industry has been dominated by small-scale sapphire miners and there is no monoplised supply of rough. So, unlike diamonds, sapphires aren’t easy to hoard.
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Besides these factors, there are many other reasons why you should go for sapphires over diamonds this year, especially if you’re considering an investment-worthy purchase. Have a look:
A diamond is actually NOT the traditional choice of engagement ring
Even the most ardent diamond loyalists may not know this, but if you’re looking for a traditional, old-school or even a retro engagement ring, a diamond is not something you should consider at all. Diamonds were literally popularised as the ideal engagement stone, as part of a marketing campaign. In 1938, the De Beers company found an abundant supply of diamonds in South Africa and needed foolproof ways to market the diamond in the wedding jewellery market.
The brand managed to market diamonds as the ultimate symbol of commitment. A lot of their promotional strategy was designed to let people think diamonds are valuable and scarce, when they, in fact, weren’t. “Even though diamonds can in fact be shattered, chipped, discoloured, or incinerated to ash, the concept of eternity perfectly captured the magical qualities that the advertising agency wanted to attribute to diamonds,” writes journalist Edward Jay Epstein in his piece “Have You Ever Tried to Sell a Diamond?”
Before the 1940s, few people proposed with a diamond. In fact, some of the most legendary engagement stones in the world have been colourful gemstones. In the Victorian and Georgian eras, topaz, sapphires, emeralds, pearls, rubies and black onyx were considered prime picks for wedding rings or engagement stones. Sapphires were considered a premium specimen for the late Victorian era because it was common knowledge that the queen liked blue. And sapphires were also more ornate than diamond centre stones, owing to their distinct hue, hence they were deemed more expensive.
Diamond Grading is A New Phenomenon
It’s common knowledge the diamond grading system is determined by its supply, unlike sapphires and some other stones whose gradations are not geared towards profit, but quality. The cut-colour-clarity-carat was only established as a grading agent for diamonds in the 1950s. Though diamonds have always been recognised as the hardest mineral, the Gemological Institute of America (GIA) established this standard in the 20th century. One of the reasons why so many testing labs exists for gemstone grading is because there are so many available treatments for sapphires and rubies (because there aren’t enough gemstones out there that can proof good enough economics, unlike diamonds)
Before the 50s, diamonds were evaluated quite differently and milky, yellow-ish diamonds were quite common. Besides, cutting technologies were also in their nascent stages and some of today’s most popular stone cuts weren’t even possible (rose-cut was the most possible cut, while brilliant-cut, trillion-cut or pear-shaped diamonds were practically impossible to achieve).
Sapphires, on the other hand, are one of the oldest known gemstones and bring with them the promise of a tradition and also the legacy of age-old artisanal production. Though the modes of modern grading have evolved, the basic facets of grading sapphires have remained the same for centuries now. Some of the most famous sapphires, be it the Star of India (the 1700s) sapphire or the crown jewel Stuart Sapphire (1600s) were deemed valuable by an already-established grading system that was already in place. The point is, sapphire grading, unlike diamond grading, is not a profit-oriented, capitalism-led invention but something that has remained the same for centuries and has been backed by tradition.
Diamonds Don’t Hold Their Value Like Sapphires
Diamonds may depreciate in value and most buyers don’t take the resale value into consideration when they buy diamonds. Truth is, diamonds often don’t hold their value. Most jewellers boost the price of diamonds to make a profit, so buyers are immediately at a loss when they try to sell them. They lose their profit margin right from the get-go. But one of the biggest perks of a diamond investment is that it is liquidable and can be sold quickly.
But buying diamonds amid raging inflation is a bad decision. Because the buyer would tend to lose out on both ends. They would be spending more than usual and will have to settle at a much lower selling price if they decide to sell it post the inflation.
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This is where superior, investment-quality gemstones come in. Sapphires, rubies, tourmalines, emeralds and aquamarines, bought from a trusted, authentic and verified source would be the ideal pick. Wholesale platforms that offer custom services are your best bet. Navneet Gems, for instance, prioritises expert evaluation are specialise in re-cutting and faceting that can help drive the prices of your gemstone up.
“We have received the highest number of stones in 2020 & 2021 then all of 2015-2019 combined because people want good cuts, just cut like diamonds”
We determine the best possible approach to cutting the stone and also consider the presence of inclusions, feathers, fissures and cracks that make gemstones vulnerable to breakage.
It’s Particularly Hard To Avoid Unethical Diamonds During Inflation
The record-high inflation has de-stabled the entire gemstone market. Diamonds could be a particularly unsafe investment at the moment, owing to the chaos in the global mining sector. The US government has enacted sanctions on Russian diamonds and payment systems which affects trade with the largest rough producer, Alrosa. As a result, some major US retailers and European platforms have put ethical bans on Russian goods altogether and have urged suppliers to avoid them altogether.
This causes some major disruptions in the market and also makes room for lesser-known, profit-oriented players to come in and profit. People are looking for cheaper diamonds and though the diamond mining is a lot more regulated than it once was, it is still vulnerable to trafficking, money laundering or child labour.
This makes it especially hard for buyers who are looking for ethical investments in gemstones and are looking for mine-to-market traceability. This is also what makes tourmalines, sapphires or rarer gemstones a more desirable option at the moment since their mining is mostly regulated and their origins can be traced more easily, especially with certain specialist wholesale platforms.
For more details on how to buy wholesale sapphires, explore here.
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Sapphires Are Simply More Significant Than Diamonds
More and more people are steering towards meaningful engagement stones or gemstones that have been associated with desired attributes. This has a lot to do with the legacy of each gemstone and an overall desire to make conscious, significant purchases. For example, tanzanite which is rare, is associated with a higher consciousness. It is known to improve physical and spiritual energy and some cultures believe placing tanzanite under your pillow can help someone have a peaceful sleep.
Similarly, something as old and coveted as sapphire also has a storied legacy. In fact, Jewish tradition holds that the Ten Commandments were written on tablets of sapphire! Besides they’ve often been associated with regality since they’re been the preferred gemstones for most royals across the globe.
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Diamonds, on the other hand, have always simply been valued solely on material terms. For many, diamonds represent the western ideal of commitment (since some major players like DeBeers or Tiffany are American). It’s important to remember that the relevance of diamonds was driven entirely by a marketing gimmick. Which is why, unlike certain coveted or rare gemstones, diamonds do not boast spiritual associations or even a meaningful legacy.
Sapphires Are Rising In Value
Naturally coloured gemstones can be your secret asset against inflation. In the last decade, coloured gemstones have experienced some of the most substantial price jumps. In 2015, the world’s most expensive ruby (The Sunrise Ruby, 25.59-carat) was sold at auction for over £22m. In 2017, the 18.04-carats Rockefeller Emerald emerged as one world’s most expensive gemstones and was sold for £4m.
A new report suggests, that sapphires and emeralds have increased in value by 5-8% per annum since 1995. This development can be explained by widespread certification, access to industry transparency and gemological analysis. In the past few years, Australian parti sapphires have experienced a steady boom in the global wholesale market as their visual and aesthetic merits were re-considered by gemologists and the commercial market. Research states that Australian sapphires account for over 70 per cent of the world’s blue sapphire production at the moment.
Teal sapphires, specifically, are experiencing a boom in business-to-consumer platforms. More and more people are looking for coloured alternatives to diamonds, that are traceable and sustainably sourced. At Navneet Gems, blue sapphires are sourced sustainably from a variety of sources around the world. Only the most vivid and cleanest specimens are considered for selling.
They are segregated by ideal ratio and sorted to create a small lot which helps in creating a perfectly calibrated jewel.
If you’re exploring gemstones that make for viable heirlooms and/or good investments, diamonds should not be your go-to pick during inflation. When you realise that the perfect diamond is subject to the market and the gradation of other gemstones isn’t, it’s quite the deal-breaker.
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For conscious buyers especially, this is a good time to invest in alternative engagement stones or naturally coloured options that have good resale value. The trusty sapphires that are only second to diamonds, in terms of hardness and durability have always been an unfailing investment choice. And now, it’s easier than ever to trace your preferred variant to determine their origin and their production journey. Find more details about custom designs and wholesale buying here