This week’s market update looks at the latest news regarding the 2020 Argyle Pink Diamonds Tender, which is continuing to attract unprecedented investor interest around the world.
We remain convinced this will help spark the next leg higher in pink diamond prices, with now being the perfect time to reassess your investment portfolio, to make sure it’s appropriately positioned for the difficult years ahead.
For whilst Australia thankfully continues to make progress as regards a return to normalisation from the COVID-19 induced restrictions to people movement and economic activity, we face many difficult years ahead.
Lower growth, higher unemployment and higher public debt are all realities to contend with over the course of this decade, with these trends all helping to encourage investors into hard assets, including pink diamonds.
Argyle Diamond Tender sparks wave of buying!
It has only been four weeks since Rio Tinto unveiled its penultimate Argyle Pink Diamonds Tender. Titled “One Lifetime, One Encounter”, the dazzling range of 62 diamonds, which can be seen in the picture below, has helped spark a rush of buying interest.
Notably, the investment interest is not just for the Tender stones themselves, but for pink diamonds in general, with incredibly strong demand being seen at Australian Diamond Portfolio.
In our view there are at least three key reasons for this increase in demand, which we see as follows:
- The economic environment investors are trying to navigate, which favours hard assets like pink diamonds over shares, cash and bonds.
- The true beauty and rarity of pink diamonds as investment assets in their own right, with diamonds like this making up less than 1% of all the diamonds that have ever been mined.
- The pending closure of the Argyle Diamond Mine, with astute investors realising they are better off investing in this market now, before the huge crunch in pink diamond supply, and the increase in demand has its inevitable impact on prices.
The exposure that the Argyle Pink Diamonds Tender gives to the whole market is only strengthening these trends, with Patrick Coppens, the general manager, sales and marketing for Rio Tinto Diamonds recently quoted, noting that: “The Argyle pink diamond story has enthralled throughout the years following the remarkable discovery of the Argyle mine in 1979. The 2020 Argyle Pink Diamonds Tender is a collection of rare earthly treasures, intricate works of art and with a potency of colour that will be keenly sought after by collectors and connoisseurs from around the world”.
Coppens’ comments were reinforced this week with articles that appeared in the South China Morning Post, and the India Times (India and China are big markets for pink diamonds) which noted that demand for pink diamonds was at all-time highs.
These articles also contained valuable insights from analysts and market commentators in the pink diamond industry which help highlight the investment opportunity that truly rare pink diamonds provide.
As one diamond market commentator noted: “Argyle pink diamond is a true love for diamond connoisseurs across the globe. In India, there are business families and high net worth individuals from places like Mumbai, Bengaluru and Hyderabad who are aware of the rarity of Argyle pink diamond and they are keen to own one. It is a collector’s item. Investment-wise it has a lot of value too. Every year, the price of Argyle pink diamond has witnessed a double-digit growth. And once the availability dries up, prices will shoot up further”.
Jewellery manufacturers are also adding to demand for pink diamonds (some investors will always like to ‘wear their wealth’), with one noting that: “Consumers are mostly well aware that this is a good product to purchase. Diamonds continue to enjoy their admiration as an investment. When mounted in well designed and manufactured jewellery, it not only has investment value, but also artistic and emotional value”.
Add all these factors together and it seems very clear that not only is the demand for pink diamonds very strong right now, but that it will remain that way for the foreseeable future.
Pink diamonds are not just for the ultra-wealthy
Whilst the Argyle Pink Diamond Tender naturally features the most expensive and exclusive diamonds, with media attention focusing on ultra-high net worth investors purchasing these stones, pink diamonds are no longer an investment for royalty and multi-millionaires alone.
Indeed, one of the attractions of pink diamonds is that they are able to be accessed by a wide range of investors, with a budget of $25,000 typically seen as a viable minimum entry point to invest in this asset class.
This helps foster a thriving investment market, with pink diamonds able to be traded easily, and incorporated into a portfolio just as easily as one can buy shares or property.
Many of our clients at Australian Diamond Portfolio look to invest between $50,000 and $200,000, either in one pink diamond, or a range of pink diamonds if they prefer to have multiple holdings in their portfolio.
These clients have done their research, and are well aware of the diversification benefits, the wealth protection, and the opportunities for significant capital gains that pink diamonds offer in the years ahead.
If you are looking to invest in pink diamonds, either for the first time, or are wanting to add to your existing pink diamonds collection before the Argyle Diamond Mine shuts forever later this year, then we would be happy to help you.
As always, we hope you’ve enjoyed this week’s edition of “In the Loupe” and look forward to any questions or comments you may have.