It’s hard to believe we have already reached December, with Christmas now just two weeks away, and a New Year fast approaching on the horizon.
This time of the year is usually the perfect time to take a break, spend time with loved ones, and recharge ahead of another year that will no doubt bring further challenges, as well as opportunities for all of us, including in the investment world.
To that end, many Australians will be saying a silent thank you that the Reserve Bank of Australia (RBA) decided to keep interest rates on hold at their meeting last week, with the local cash rate still sitting at 4.35%.
While this is good for anyone with a mortgage, it is too early to pop the champagne, as rates may still go higher in early 2024. It also poses an ongoing challenge to one of the other great threats that investors are facing today: inflation, and how to protect and grow wealth in an environment where the real value of many of our assets, and the savings that we have in the bank are being eaten away.
Enter pink diamonds. Not only are they tangible, beautiful, stable and proven performers over the long-term, they are also trusted inflation hedges with a strong history of protecting purchasing power in environments like the one we face today, where consumer prices are rising at a rapid pace.
And, as we will highlight below, the outlook for pink diamonds, and the support underpinning this market is only strengthening, with results from the recent Rio Tinto pink and red diamond tender blowing the market away.
Superb results for ‘Beyond Rare’ Pink and Coloured Diamond Tender
Rio Tinto, the owner and operator of the Argyle Diamond Mine, has continued to make waves in the pink diamond market, even though the mine itself ceased operating just over three years ago in November 2020.
There is no better or more recent evidence of this than the incredible results they just achieved with their first ever ‘Beyond Rare’ Tender. The Tender was a collection of 87 diamonds weighing 29.96 carats in total, with pink and red diamonds sourced from the Argyle Diamond Mine, and a range of yellow diamonds from the Diavik Diamond Mine located in Canada also included.
The headline below from Diamond World captures the market reaction to the results of the just completed Tender perfectly, with interest coming from investors, jewellery collectors and designers, as well as Argyle Trade partners.
The article itself noted that “bidding for the carefully curated collection was strong, with individual, multiple and global bids and a broad geographic spread of successful bidders from Australia, Europe, Japan, Hong Kong, Singapore, US and Israel”, with Sinead Kaufman, Rio Tinto Metals Chief Executive going on to state that; “We are delighted with the results from this new sale format for Rio Tinto’s diamonds business, delivering results that reflect the global demand for highly collectable natural coloured diamonds and the resulting value creation.”
Results from the Rio Tinto Tender have made their way around the world, with articles in Business News, Rapaport, The West Australian, and a range of other media mastheads. This can only be a good thing for investors in this asset class, given the extra attention it will bring, and price momentum it will help to build.
As a final comment on the recent news flow focusing on pink diamonds and it has to be mentioned that the strong results for these asserts haven’t been limited to Argyle Tenders, with recent results from auction house Bonhams highlighting the strength of the pink diamond market.
This included a cushion-cut, 2.03-carat, fancy-pink, VS1-clarity diamond ring which realized just over $300,000, some $80,000 above estimates, while a 1.37-carat, fancy intense purplish pink, VS2-clarity loose diamond, also sourced from Argyle, sold for just under $280,000, surpassing its high estimate by $100,000.
Speak to Australian Diamond Portfolio
The results from the above pink diamond tender have set the industry alight, with colleagues and contacts of ours across the global pink diamond trade all thrilled with the news.
We’ve also seen a spike in interest, from both new and existing clients, as the clear upward trend in pink diamond prices, coupled with the broader economic, financial market and investing climate, reignites demand for these rare and beautiful stones.
We only see this strengthening as we move into the New Year as investors seek out assets that can provide tangibility, inflation protection, portfolio diversification, and stable long-term returns, with pink diamonds having historically been in a league of their own when it comes to delivering on all of the above four factors.
The team at Australian Diamond Portfolio would love to speak to you if you would like to discuss the merits of investing in this asset class, the range of sizes and values available, how to safely invest in this space, and the end to end solution we offer both Australian and International clients.
Through our partners, Australian Diamond Portfolio also has the privilege of offering several lots from the Beyond RareTM Tender to our clients. We are proud to offer our clients the opportunity to own a little piece of Australian history.
As always, we hope you’ve enjoyed this week’s edition of “In the Loupe” and we look forward to any questions or comments you may have.