Attractive returns – with interesting performances during the past decade, low volatility and minimal correlation diamonds epitomize a major asset class with inflation protection and the character of real assets, global demand will increase as forecast lead to rapid price increases. Most of the existing mines have reached their peak power and the production of rough diamonds is increasingly expensive (eg: from mines open still, many have to resign due to increasing environmental concerns). It is generally expected that no new major mines are opened in a medium term, the long lead time given can last up to 7-10 years for a new diamond mine. Diamond fields here are much easier to handle and are only minimally different by the commodity flow rates. At the same time, there is a growing demand from consumers and the industry regarding rough diamonds, particularly in Asia and UAE. China is already the second largest market for wholesale polished diamonds. In addition, there is a strengthening of consumer demand from the traditional retail markets in the U.S. and Europe, as they threaten to be obtained by the recession. Starting today, physical diamonds are not easily accessible to institutional investors. Despite their complexity, based on their interesting features, diamonds are recognized as one of the top new attractive alternative investment asset. Alternative Investment publications (after Bain report - The Global Diamond Industry) rely on diamond investment reports. Thus, the theme also appears on the radar of institutional investors and has long been regarded as no more speculative business.
For decades gold investors have considered one of the most valuable assets and it is therefore one of the safest investments in the world. In times of crisis or stock market panic, investors always resorted to the safety of gold and thus pushed its price higher. In addition, gold is traditionally seen as a good hedge against inflation in times of inflation, the price is tended to increase. Gold has persevered in times of stress in political and financial systems. Gold outperformed all other asset classes during the credit crisis in 2008 and the European debt crisis at the beginning of this year. Investors are betting on gold for fear of sovereign defaults and deflation. Even if the gold price drops out of unknown market strategies, it will always return higher priced following logical forecasts.