Over millions of years, intense pressure on carbon results in the formation of natural diamonds. A really precious diamond, such as one that is particularly huge or has an uncommon hue, is the only type that will maintain or even increase in value over time.
How valuable are diamonds and gold?
Investing in Diamonds vs. Gold Diamonds may be a good investment, but only if certain conditions are met. Diamonds, on the other hand, only have a modest potential to hold their value over the long term. Because of their rarity, diamonds can command a greater resale price than gold, which is more powerful in terms of inflation and overall value.
When Compared to Gold, Why Is Diamond More Expensive?
The primary determinant of a metal’s or gemstone’s price is the metal or gemstone’s or both of those things’ scarcity. The more the metal’s or gemstone’s rarity, the greater the metal’s or gemstone’s value. For diamonds and gold, the same holds true as well. The price of rare items rises as their scarcity grows. Due to their rarity, diamonds are more valuable than gold.
Gold, on the other hand, is a far more affordable metal. In addition to its rarity, mining diamonds from the earth, which is a tedious and arduous procedure, makes them more expensive than gold. The diamond must be handled with extreme care during the extraction process. The Earth’s crust contains around 200,000 parts per billion of diamonds or carbon. The rarity of diamonds is primarily due to the inherent capacity of carbon to change into diamonds, and little to nothing to do with the diamonds themselves.
The Earth’s mantle is considered to be the source of diamonds, which are subsequently delivered to the surface of the planet. If the meteorite impact caused diamonds to be forced into the Earth’s crust, they might be called jewels, but the problem is that these diamonds are so little that they cannot be referred to as such. Basically, the deep magma would bring the diamonds that are generated in the earth’s mantle to the surface of the world. As the mountain grows, deep-seated rocks may slowly rise to the surface, pushing them up.
These diamonds would be graphitized throughout the gradual ascent, preventing them from ever reaching the surface as jewels. The diamond formation is governed by a complex chemical formula that varies with depth, pressure, and temperature. A total of 725,000 pounds of pressure of 5 billion pascals would be applied to the carbon buried up to 93 miles below the Earth’s surface, where it would be heated to 2200 degrees Fahrenheit and compressed. Volcanic eruptions would quickly raise the diamonds to the surface, where they would be cooled. All of these processes result in the development of natural diamonds that can be mined with the proper equipment.
The clarity, colour, cut, and carat weight of a diamond are all factors that affect its value. According to a general rule of thumb, better-quality stones are more expensive because of their colour and clarity, as are larger stones and more preferred cuts. The higher the perceived worth of a substance, the more exorbitant its price. In spite of the fact that they are far less common than gold, diamonds command a higher price than gold. As mines near the end of their useful lives, the output of diamonds is decreasing.
The high price of diamonds is due to the fact that they are difficult to produce, there is a limited quantity of high-quality stones, and buyers from all over the globe compete for them. It’s a matter of supply and demand, plain and simple. Today’s demand for diamonds is far higher than it was a few years ago. It is expected that demand will continue to rise at an even faster rate. It implies that diamonds, which are popular as both jewellery and financial instruments, will always be in demand.