Why Pink Diamonds Are Outperforming Gold as an Investment

Since mining stopped in 2020 for rehabilitation and decommissioning, the site has entered a new phase, and the Argyle mine gems have received a lot of attention. Western Australia's Argyle mine, which is known worldwide for its exceptional coloured diamonds, stopped production in November 2020. However, the pink diamonds it produced never stopped creating a buzz. The attention stems from the fact that only a tiny fraction of all diamonds mined are pink, and supply is falling with the closure of this mine in Australia. Certainly, it is scarcity that’s fuelling this demand!

What is Fuelling the Demand for Pink Diamonds?

In its 37 years of operation, the Argyle mine has produced more than 865 million carats of rough diamonds. However, even one soup bowl wouldn't be able to carry all the reported millions of carats in the famed pink diamonds, and that is because these Blush-toned diamonds account for only 1% of all diamonds mined.

The petal-toned diamonds mined in Argyle are considered among the highest quality in the world, all because of their unique, warm colour. Due to their great rarity, these delicately tinted diamonds can cost up to 50 times as much as white diamonds.

As a result, pink diamonds are no longer being purchased only for use in high-end jewellery but also as an investment with a long-term horizon. They have significantly outperformed gold and stocks, with some high-quality stones showing a 391% value increase since 2005, a massive jump by any standard. 

And we look back to 2005 because, as William Gant, now Managing Director of L.J. West Diamonds, explains, it was around this time that pink diamonds from the Argyle mine began to be identified by a laser inscription on the girdle. This mark not only set them apart from more softly flushed stones but also drove stronger demand. However, certifying Argyle pink diamonds can still be complex, given that these inscriptions were only introduced from 2005 onwards.

According to a report released by the Australian Diamond Portfolio, these Australian diamonds have increased in value by an incredible 30% over the past 12 months. This clearly reflects the growing interest in, and investment in, this distinctive asset.

Natural pink diamonds command exceptionally high prices due to their rare beauty and extreme scarcity. Among the most uncommon gemstones in the world, they consistently achieve astronomical valuations in the global market. As their availability continues to decline and admiration for them grows, the value of authentic, naturally scarce coloured diamonds Pricikeeps steadily rising.

Pricing of Coloured Diamonds

The pricing of fancy coloured diamonds follows a similar trajectory to that of traditional diamonds, increasing with carat weight, cut, colour intensity, and clarity. Rosy diamonds, particularly those of exceptional quality, command staggering prices. With each record-breaking sale, their value continues to climb, consistently surpassing previous benchmarks..

There has been a dramatic increase in the demand for these diamonds throughout the years. It was predicted in early 2000s that open pit mining at the Argyle diamond mine would last for only ten more years until the mine closed permanently.

As a result of the practically complete depletion of items through open pit mining, considerable excavation beyond 2000 metres is required to collect the amounts required. Pink diamonds are becoming increasingly scarce as time goes on, and the effects of widespread mining are still being analysed.

Since 1985, the Argyle diamond mine in Western Australia has produced over 90% of the world's supply of natural pink diamonds. Some of the most outstanding examples of coloured diamonds ever mined from the Argyle were pink, but only a select few were saved, polished, and authenticated.

While Africa, India, Brazil, and Russia contribute to the smaller 10% supply of pink diamonds, those lacking official Argyle certification have seen minimal growth compared to their certified counterparts. FCRF data shows that uncertified pink diamonds recorded a mere 1% value gain in the last five years, highlighting the premium market placed on Argyle provenance.

Argyle-certified pink diamonds have become the ultimate, finite luxury investment. Their 18.6% average annual appreciation outpaces traditional markets like real estate and stocks, making them a preferred choice for high-net-worth investors seeking scarcity-driven value. They are easily transported and stored, making them an ideal, discreet, and highly compact investment. As a finite natural resource with sustained demand, they offer a reliable hedge against inflation and stronger long-term wealth preservation than paper assets.

Turns out, all that glitters isn’t alsways gold, sometimes it’s a rare shade of pink doing the work.