Why Yellow Diamonds Are a Good Investment

Most modern diamond mines produce white or colorless gems which have long dominated the diamond market as the most easily accessible consumer choice. Until the last few decades, rarer colored diamonds were only popular among wealthy collectors and royalty. They were overlooked by mainstream society, as they were considered to be geological oddities. However, in the 1970s, new cutting styles for colored diamonds were developed that greatly emphasized the intensity of their color and made them instantly more popular. These brilliant diamonds have since become profitable investments, and one of the most profitable types of investment stones are loose yellow diamonds.

When nitrogen is present within a diamond, it produces one or more shades of yellow. The popularity of yellow diamonds has grown considerably over the last decade, and with their diminishing supply, their value has also increased. They are available in pure yellow colors of various intensities, or they may contain secondary overtone colors, including orangish yellow, brownish yellow, and greenish yellow in varying combinations. These stones are deemed “fancy” when they display greater color than the “Z” color grade of the grading scale.

Unlike other types of monetary investments, diamonds are easily transportable, discreet investments. Colored diamonds are currently considered to be the best types of investment gemstones, and yellow diamonds in particular tend to fetch a pretty penny. According to the International Business Times, in 2011, a rare yellow diamond sold for over $12 million. Prior to that, the record for a yellow diamond sale price was $6.58 million.

Even with stones of small carat size, the value of colored diamonds is quite high compared to their weight, since one carat typically corresponds to 0.20g of gold. A colored diamond’s value can represent several gold bars, especially when one buys the more unique and intense yellow variety.

Some of the highest diamond investment returns have been seen in loose yellow diamonds, which have repeatedly proven their dominating stability as excellent investment opportunities. During the period between the year 2000 and 2012, the price of a five-carat fancy intense yellow diamond showed an increase in value of 350 percent. The value is in the stone itself, not the jewelry or other setting it may be in, so collectors typically seek loose diamonds.

Since the popularity of the yellow diamond has experienced a steady increase, experts in the colored diamond industry foresee dramatic rises in prices over the next decade and beyond. There are only so many colored diamonds in existence, and mines have begun to reach their peak potential. There have been no new discoveries of colored diamonds since the year 2001, and one of the largest yellow diamond mines in the world is slated for closure in 2018. With supply dwindling, demand is sure to drive the price of yellow diamonds up even higher in the future, making them an excellent investment.

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