Six Reasons Why Sapphires (and Not Diamonds) Are Your Secret Weapon Against Inflation
Diamonds can be a risky investment during inflation. Sapphires, on the other hand, have a lot going for them. Buying diamonds could prove a loss for buyers amid inflation and the decline in dollar value, volatile markets, etc. The durable Sapphire is emerging as a better alternative for wholesale buyers or engagement ring shoppers. So why do 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 is it harder to find ethical, sustainably produced diamonds during inflation?
Sapphires are more meaningful than diamonds and thus more appealing to post-pandemic-conscious buyers.
Inflation is raging globally, and experts claim it’s the highest ever. Moreover, financial experts worry that with Europe in the middle of a significant conflict and China during a lockdown, things will only get worse for major players in the gemstone and mining sector.
Buying a diamond engagement stone will cost you much more than usual. The decline in the value of the dollar has made investing harder. Moreover, purchasing 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 U.S. market. So, unless you’re buying bigger or rarer diamonds, stocking up on wholesale diamonds, and buying in bulk, you’re at a loss.
Is buying diamonds a wrong decision at the moment? For mid-level retail platforms and commercial buyers, this news could be better. Martin Rapaport, Chairman of The Rapaport Group, who 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 not an appealing decision for middle-class buyers or retailers. “The U.S. middle-class jewelry 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 an alternative to diamonds. And what’s the best option 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 most significant appeal is its gorgeous and striking blue shade. Sapphires are corundum and exhibit a range of colors depending on what transition metal is present. In commodity-rich emerging markets like the Gulf, oil-producing South American countries, etc., sapphires are experiencing significant demand.
But Sapphire’s versatility and overall appeal make it a strong contender against diamonds in an inflated market. Millennial buyers especially prioritize traceability regarding investment stones and bridal jewelry. Sapphires are easier to trace back to their origins, especially when working with a trusted source. For instance, a premium-quality, precision-cut Australian teal Sapphire would be a wiser purchase than a diamond. Also, because of the natural price of the Sapphire, the sapphire industry has been dominated by small-scale sapphire miners, and there is no monopolized supply of rough. So, unlike diamonds, sapphires aren’t accessible to hoard.
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 NOT the traditional choice of engagement ring. Even the most ardent diamond loyalists may not know this, but if you’re looking for a classic, old-school, or even a retro engagement ring, a diamond is not something you should consider at all. Instead, diamonds were popularized as the ideal engagement stone in 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 jewelry market.
The brand managed to market diamonds as the ultimate symbol of commitment. As a result, many promotional strategies led people to think diamonds were valuable and scarce when they weren’t. However, diamonds can be shattered, chipped, discolored, or incinerated to ash. The concept of eternity perfectly captured the magical qualities that the advertising agency wanted to attribute to diamonds,” journalist Edward Jay Epstein wrote in his piece “Have You Ever Tried to Sell a Diamond?”
Before the 1940s, few people proposed a diamond. Colorful gemstones are some of the most legendary engagement stones in the world. In the Victorian and Georgian eras, topaz, sapphires, emeralds, pearls, rubies, and black onyx were 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 center stones. Owing to their distinct hue, they were deemed more expensive.
Diamond Grading is A New Phenomenon
It’s common knowledge that the diamond grading system is determined by its supply, unlike sapphires and some other stones whose gradations are not geared towards profit but quality. For example, the cut-color-clarity-carat was established as a diamond grading agent in the 1950s. Though diamonds have consistently been recognized as the hardest mineral, the Gemological Institute of America (GIA) set this standard in the 20th century. One of the reasons why so many testing labs exist 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 prove good enough economics, unlike diamonds).
Before the 50s, diamonds were evaluated differently, and milky, yellowish diamonds were common. Besides, cutting technologies were also nascent, and some of today’s most famous stone cuts weren’t even possible (rose-cut was the potential cut, while brilliant-cut, trillion-cut, or pear-shaped diamonds were practically impossible to achieve).
The gigantic Stuart Sapphire found a spot on the royal crown.
On the other hand, Sapphires are one of the oldest known gemstones, bringing the promise of a tradition and the legacy of age-old artisanal production. Though the modes of modern grading have evolved, the fundamental facets of grading sapphires have remained the same for centuries. Some of the most famous sapphires, the Star of India (the 1700s) sapphire or the crown jewel Stuart Sapphire (1600s), were deemed valuable by an already-established grading system. The point is that sapphire grading, unlike diamond grading, is not a profit-oriented, capitalism-led invention but something that has remained the same for centuries and is backed by tradition.
Diamonds Don’t Hold Their Value Like Sapphires
Diamonds may depreciate, and most buyers don’t consider the resale value when they buy diamonds. The truth is that diamonds often don’t hold their value. Most jewelers 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 liquidated and sold quickly.
But buying diamonds amid raging inflation is a wrong decision. Because the buyer would tend to lose out on both ends, they would be spending more than usual and have to settle at a much lower selling price if they decide to sell it post-inflation.
This is where investment-quality gemstones come in. Sapphires, rubies, tourmalines, emeralds, and aquamarines, bought from a trusted, authentic, and verified source, would be ideal. Wholesale platforms that offer custom services are your best bet. Navneet Gems, for instance, prioritizes expert evaluation and specializes 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 than all of 2015-2019 combined because people want good cuts, just like diamonds.” -Navneet A.
We determine the best possible approach to cutting the stone and consider 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. Moreover, diamonds could be a particularly unsafe investment, owing to the chaos in the global mining sector. The U.S. government has enacted sanctions on Russian diamonds and payment systems, affecting trade with the largest rough producer, Alrosa. As a result, some major US retailers and European platforms have put ethical bans on Russian goods and urged suppliers to avoid them altogether.
The record-high inflation has de-stabled the entire gemstone market. Creating significant market disruptions allows lesser-known, profit-oriented players to come in and profit. People are looking for cheaper diamonds, and though diamond mining is much more regulated than it once was, it is still vulnerable to trafficking, money laundering, or child labor.
They need to make it easier for buyers who are looking for ethical investments in gemstones and are looking for mine-to-market traceability. On the other hand, this also makes tourmalines, sapphires, or rarer gemstones a more desirable option since their mining is mainly regulated, and their origins can be traced more efficiently, especially with specific specialist wholesale platforms.
Sapphires Are More Significant Than Diamonds
People are increasingly steering towards meaningful engagement stones or gemstones associated with desired attributes. This has a lot to do with the legacy of each rock and an overall desire to make conscious, significant purchases. For example, rare tanzanite is associated with a higher consciousness. It improves physical and spiritual energy; some cultures believe placing tanzanite under your pillow can help someone sleep peacefully.
Similarly, something as old and coveted as Sapphire also has a storied legacy. For example, Jewish tradition holds that the Ten Commandments were written on tablets of Sapphire! Besides, they’ve often been associated with regality since they’ve been the preferred gemstones for most royals across the globe.
Diamonds, on the other hand, have always been valued solely on material terms. For many, diamonds represent the Western ideal of commitment (since some significant players like DeBeers or Tiffany are American). It’s important to remember that the relevance of diamonds was driven entirely by a marketing gimmick. Unlike certain coveted or rare gemstones, diamonds do not boast spiritual associations or a meaningful legacy.
Sapphires Are Rising In Value
Naturally, colored gemstones can be your asset against inflation. Unfortunately, in the last decade, colored gemstones have experienced some of the most substantial price jumps. In 2015, the world’s most expensive ruby (The Sunrise Ruby, 25.59-carat) auctioned off for over $26,783,900.00. In 2017, the 18.04-carats Rockefeller Emerald emerged as one world’s most expensive gemstones and sold for $4,870,140.00.
A new report suggests that sapphires and emeralds have increased in value by 5-8% annually since 1995. This development is explained by widespread certification, access to industry transparency, and gemological analysis. In addition, 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. As a result, research states that Australian sapphires account for over 70 percent of the world’s blue sapphire production.
Teal sapphires, specifically, are experiencing a boom in business-to-consumer platforms. As a result, more and more people are looking for colored alternatives to traceable and sustainably sourced diamonds. 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 sale.
They are segregated by ideal ratio and sorted to create a small lot which helps create a perfectly calibrated jewel.
If you’re exploring gemstones that make for viable heirlooms and sound investments, diamonds should not be your go-to pick during inflation. However, when you realize that the perfect diamond is subject to the market and the gradation of other gemstones isn’t, it’s quite the deal-breaker.
Now is a good time for conscious buyers to invest in alternative engagement stones or naturally colored options with good resale value. The trusty sapphires that are only second to diamonds in hardness and durability have always been an unfailing investment choice. And now, it’s easier than ever to trace your preferred variant to determine its origin and production journey.
Diamonds Are Not Forever -The Rising Trend of Other Precious Stones
The market for fine luxury jewelry has grown vastly, with year-end 2021 U.S. jewelry retail sales up 51% at $95.2 billion. While diamonds have dominated this market for years, we are now seeing other untreated-colored gemstones, such as emeralds, rubies, sapphires, and pearls, growing in demand.
75% of retailers and 92% of manufacturers reported that the precious-colored gemstone jewelry category is a higher margin category than diamond jewelry.
40% of younger consumers (23-40) chose sapphire as their favorite gemstone, closely followed by ruby and emerald, with half of this group already having purchased sapphire jewelry.
Pearl jewelry sales are strong among the millennial 25-to-35-year-old demographic.
Specifically, 42% of millennials are likely to request pearl jewelry, compared to only 19% of 46-to-55-year-olds.
Here’s what we have found to cause this shift in demand and new sourcing opportunities.
Historically, gemstone mining was limited to only a few different countries, with Sri Lanka being the largest source of many precious stones. However, with new mines developed in other locations like Zambia and Ethiopia, colored precious gemstones have become a more affordable option for sellers to build their collections.
Millennial market, not surprisingly, millennials are looking outside the box and willing to experiment with new trends in the gemstone industry. They seek more unique pieces to build their jewelry collections and turn to gemstones for bridal jewelry. In addition, rich jewel tones have been making a more significant appearance in color palettes for wedding parties and venues, with precious jeweled accessories to coordinate.
Celebrities and royalty have long chosen gemstones like sapphires, rubies, and emeralds for engagement rings instead of diamonds. One of the most famous engagement rings is a beautiful sapphire ring owned by Princess Diana and her daughter-in-law Kate Middleton. Pearls have also been more prominent in the fashion industry, with designers such as Dolce and Gabbana, Prada, Givenchy, Dior, Versace, Miu Miu, and Chanel showing pearls on the catwalk.