Diamonds now a cut above gold?

When it comes to investing in precious metals, gold's glitter has remained the brightest. But diamonds are invading gold's sparkling bastion, given its spectacular performance over the past couple of years, Times of India reported.
Apart from being studded in gold, silver and platinum jewellery, diamonds are steadily becoming 'investing gems' in the country, especially among high net-worth individuals ( HNI), who are wary of volatile gold prices.
Despite a modest pullback last month, prices for polished diamonds increased by 25% in the past year, as new supplies were unable to keep up with strong demand, especially from India and China.
Price of top-quality polished stones has almost reached an unprecedented $170,000 a carat in January.
Aagam Sanghavi, director, Sanghavi Export, says, "Diamond business worldwide has become more transparent than ever. Because of diamond certification, investors could the exact value of diamonds they are investing in. If you invest in 3 carat flawless round shaped diamonds, you would get around 10 to 15% returns in a year."
Kaushik Mehta, a leading diamond jewellery manufacturer in Mumbai, says, "Most of our clients buy high-quality diamonds ranging from 3-10 carats, which are very costly. Many keep it as investment. They book profits when prices appreciate."
"The polished diamond demand in the country is set to double by 2020 from the current $1.3 billion to $3 billion. Diamonds are also becoming a commodity for investment because there is no risk of price volatility as compared to gold.
"Polished diamonds continue to offer steady price appreciation of 5-6% per annum," says Sanjay Kothari, vice-chairman, Gems and Jewellery Export Promotion Council (GJEPC).