Gold vs Diamond: Which is Best for Investment

Since ancient times, gold and diamonds have been among the most widely used precious assets. Consequently, when it comes to investing in precious assets, gold and diamonds often become our first choices. Both have their unique appeal and value. But you might wonder which one is the better investment. Well, we have got you covered!

In this blog, we will deep dive into each of them to find out which can be a better option, especially when it comes to investing in diamonds vs gold. Continue reading for more insights!

Investing in Diamonds vs Gold: A Comparison

Gold has been considered a symbol of wealth, stability, and prosperity for ages. However, diamonds stand out as a unique investment due to their rarity and individuality. 

Let’s find out which one can be a better investment option:

• Value Storage

For centuries, gold has been a symbol of wealth and prosperity. Therefore, its value tends to remain stable over time, making it one of the best ways to store value and wealth. On the other hand, the diamond industry has many intermediaries between the buyer and the seller, which usually reduces the resale value of diamonds.

• Stability in Diamond vs Gold Price

The price of gold is influenced by several factors, such as inflation, economic conditions, demand, and supply. On the other hand, the price of diamonds is typically influenced by factors such as fashion trends, industry dynamics, and consumer demand.

Nevertheless, the price of gold is comparatively more stable than that of diamonds.

• Liquidity

Gold has a higher liquidity as it has an established market across the world and global acceptance. This also makes it easier to buy and sell gold and gold-linked instruments. Comparatively, diamonds are not highly liquid, as the purchaser typically verifies and validates the characteristics of the diamond to be sold.

• Hedge Against Inflation

Unlike any other assets, the value of gold tends to remain steady, and may even increase, during economic downturns, making it a reliable hedge against inflation and market volatility.

On the other hand, diamond prices can fluctuate and are comparatively less reliable for hedging against inflation.

• Long-Term Gains

When it comes to long-term gains, gold becomes the first choice for investors due to its stability and strengthening of its value over time despite occasional price fluctuations. However, the value of diamonds may not appreciate at the same rate as compared to gold.

• Diverse Investment Options

Investors can invest in gold through various investment vehicles such as physical gold, gold ETFs, gold mutual funds, and sovereign gold bonds. The investment options in the case of diamonds include physical diamonds and diamond investment funds.

• Historical Significance

Gold has immense historical significance, being used as currency since ancient times and considered a symbol of wealth and prosperity. On the other hand, diamonds are mainly valued for their beauty, elegance, and luxury.

• Physical Properties

Gold and diamonds come with different physical properties. Gold is a precious metal and is lustrous with a yellow shine, while diamond is a precious gem and the hardest known natural material on earth. It is rated based on carat, cut, clarity, and colour.