The word “Diamond” is probably the most emotionally charged word in the entire lexicon of gems. Diamond is the most sought after gem in the world. Whether or not the diamond deserves this pinnacle is up for debate, but the fact that the diamond sits on the pinnacle is not.
This is due to many factors:
1. Diamonds are beautiful to the eye.
2. Diamonds tend to last.
3. There are enough to go around. Well sort of…..
4. They are well promoted.
That diamonds are beautiful to the eye is easy to understand when the optics of diamonds are understood. Of all the normally known gems, diamond has the best optics. Diamond has a high dispersion which means that diamonds tend to break up or disperse light into the full rainbow of colors. This is part of the way diamonds dazzle the eye.
In addition to a high dispersion diamonds have a high refractive index which makes them exceptionally brilliant. These two properties together make diamond fun to look at. Just imagine early humans seeing diamonds in comparison to dirty, grimy reality in which they lived. No wonder the aura around diamonds started and has been passed on from generation to generation for the millennia.
Another wonderful property of diamonds is their durability. Again, from early times to current times the fact that we can obtain a diamond, have it for the rest of our lives and then pass it on for generations yet to come is a big advantage diamonds have over almost any other property we might have. Gold is prized for the fact that it won’t rust and decompose yet gold objects, due to their softness have problems with being scratched and even problems with losing their shape with wear over time. Not diamonds!
While diamonds are not plentiful the demand, for diamonds has created a lot of mining effort all over the world. In other words, don’t think that you can go out into your back yard, start digging, and find diamonds. They are not plentiful. Yet, billions of dollars in diamonds are mined each year. How?
In the top 15 diamond-producing countries of the world, prospectors were able to identify the unusual formations in which diamonds are produced by nature, and capital formation has supplied the necessary infrastructure to start up the mining.
The incredible demand for diamonds has created an equally incredible mining industry. Millions of carats of diamonds are mined each year producing millions of carats of finished diamonds. Of course the majority of finished stones are both small and poor quality. The main issue for us here is that there are enough diamonds available to purchase that millions of people can buy diamonds each year. Most people, however many diamonds they own, want more diamonds, larger diamonds, and better diamonds—than they currently own. If there were not quite a few diamonds available for purchase the market would probably be smaller.
Rarity is one of the reasons that gems are respected and sought after yet extreme rarity and lack of availability can limit demand. For instance, alexandrite is the rarest of all well known gems. Alexandrite is so rare that most people have never even seen a natural alexandrite and even the few people who have seen one have not seen a large, high quality example of the stone. Alexandrite is one of the gems which, in my opinion, has had its demand weakened by its rarity and lack of availability. Alexandrite is still expensive, yet near perfect 10 carat diamond is worth more than a near perfect alexandrite. Rarity itself is important but not a sole determinant of price. There is a good market for alexandrite, simply a smaller market than for diamonds.
Of course, promotion helps grease the wheels of the diamond market. While the term promotion may have a negative sound in our current lexicon, getting the word out is really the basis for promotion. How can we know if there is something really great if somebody does not tell us? How can we know where to get it? All of the foregoing characteristics of diamonds are what make promotion possible. If diamonds were not so notable for their beauty what would there be to say about them? If diamonds were not so durable why would we pay considerable sums for them? If diamonds were not available to sell, merchants would not stock, sell and advertise them. Anything sold worldwide on a large scale basis has to be available in sufficient quantities that the market can be ongoing.
But, keep in mind, if people did not love diamonds so much and be willing to part with their money for diamonds the very expensive mining would not happen and production would fall and diamonds would seem a great deal rarer. It is a brain teaser!