Diamonds?

[Hawkeye]

I noticed that Provident Metals is now selling diamonds as a "bullion like" investment. I have zero experience with diamonds (other than my wife's wedding ring) and was curious about them. Does anyone know anything about their investment potential? Loose diamonds would be cool to have in a James Bond kind of way, but it is practical for an average Joe? I am going to assume that the ones on Provident aren't a great deal, but I know nothing about it.

http://www.providentmetals.com/bullion/ ... =slideshow

[Z00]

Grading diamonds is MUCH more subject to the individual appraiser than appraising numi coins will ever be.
My idea is that unless you are knowledgeable about assessing the quality of the stones... stick with silver or gold. At least you always know the minimum value with a scale.

[Saabman]

Knowing DeBeers probably not your best bet.........

[Bluegill]

Grading diamonds is MUCH more subject to the individual appraiser than appraising numi coins will ever be.

The understatement of the year!

You think the typical coin dealer is scummy, they are saints compared to the typical diamond and precious stone dealers.

That buy/sell spread Provident is currently advertising doesn't even remotely on a good day even come close to the buy/sell spread the dealers in my area offer. You're lucky to get a ⅓ of what you paid for a diamond around here, usually it's closer to a ¼. Gotta wonder how long that lasts at Provident...

Wonder once they sell these out they stop selling them altogether and will no longer buy them back... Forcing one to go to other avenues and getting bent over the end of the counter.

The mark up on diamonds is borderline criminal. Most dealers will not buy back a diamond they sold. They will sell it for you on consignment, again be prepared to get bent over the end of the counter.

It seems all the dealers always have top grade stones, but yet always state the stones coming in are always low grade. Yeah right. Tell them that the dealer you bought it from graded it such and such (paperwork be damned), they flat out tell you you got ripped off and you should have bought from them.

Of course they are always willing to buy these low grade stones...

I wouldn't touch these for anything.

[Hawkeye]

I'm definitely shying away from the Provident diamonds (and all others except for the occasional pretty one for the wife). I've never really seen them as an investment on the same level with gold and silver, but it doesn't hurt to educate yourself about things. I didn't know that the grading was so subjective and I didn't know about the high markups. Now I do. Thanks for the answers!

[InfleXion]

Gems are not fungible. I have a few but no diamonds, just because they are neat and have value, but since they don't fulfill the fungibility requirement of a unit of account they are inferior to metals in my book for that reason alone since if you can't grade them then a buyer and a seller will have a hard time agreeing on the value.

Also when you buy diamonds you will typically lose close to 50% of the value if you were to turn around and resell. With gold and silver it's more like a 5-10% loss.

To me the most important thing that is specific to diamonds however is that Russia announced last year that they have trillions of karats of high quality diamonds in a crater in Siberia they've been sitting on since the 1970's, the supply of which exceeds the entire global diamond industry.

I always say buy what you like, that way if it doesn't pan out as an investment at least you are still glad to have it I have no idea if this site is a good deal since it's not what I'm into.

[Hawkeye]

Fungible - that's the word I was looking for. That's probably the main reason diamonds make me nervous as an investment. Every one is totally different. But I still like them. They're shiny and cool. If I had a ton of money and all of the other thousand things I wanted, having a little bag of diamonds would be fun. But that's a long ways down the road.

[barrytrot]

So if I read/view it correctly you are buying the tiniest diamonds weighed TOGETHER to get 1 ct.

Diamonds from my brief experience buying them have a price that can best be described like this:

Tiny = FREE
1/4 ct = Something
1/2 ct = 5 times Something
1 ct = 50 times something
etc.

So I don't see how this is an "investment" when no one cares about "diamond dust". Now if it was a single 1 ct. diamond I would give it a second look but for tiny/dust diamonds it's not worth it and no one is lining up to buy minuscule diamonds.

[Hawkeye]

Diamonds from my brief experience buying them have a price that can best be described like this:

Tiny = FREE
1/4 ct = Something
1/2 ct = 5 times Something
1 ct = 50 times something
etc.

Excellent chart. I like diamonds, but when I saw 1 total carat of tiny diamonds for $300, my gut told me that was not good at all. But the stupid part of my brain kept saying, "but they're so sparkly and cool looking." I have got to find a way to shut down that part of my brain.

[InfleXion]

You could appease that part of your brain by buying sparkly and cool looking gems other than diamonds which is what I do Rubies, emeralds, amethyst, sapphire, opals, etc. are all really nice and pretty cheap compared to diamonds. I prefer the color in them too vs. being clear.

[dannan14]

Rubies, emeralds, amethyst, sapphire, opals, etc. are all really nice and pretty cheap compared to diamonds. I prefer the color in them too vs. being clear.

i've done a little reading on gems as an investment and it seems that oftentimes, especially for stones coming from Asia, the color is added by chemical process. The learning curve was so steep i decided the only gems i will likely ever have will come straight from the ground.

[InfleXion]

You could try more exotic, location specific stones such as Saskatchewan's ammolite, or our very own Ellensburg blue here in Washington. My uncle hunts for blue and has found quite a bit of it. These are more rocks than gems so you can be more confident they aren't artificially colored... I think

[dannan14]

That's an interesting idea. Would be a good diversion during a long road trip too, with a little homework beforehand.

[mflugher]

I can sell you any of those dias for 1/3 the price they asking if you buy 3ct plus.

those are astoundingly terrible deals.

I'm not sure why they are buying them back at the prices they are paying, there is at least $150 worth of cardboard in their buyback price... If i can sell them similar goods at 1/2 what they are offering to buyback at, but they won't be in the fancy box... I'm assuming the buyback prices will go down at some point before they ship... just because they should be able to source these diamonds for significantly less than what they are currently offering to buyback at...


Also these are not quite "diamond dust" we do buy and sell diamonds as small as 1/2 point.

The diamonds found in Russia it was my understanding were high end industrial diamonds as much as 5x harder than regular diamonds, not gem quality stones...


FYI dias are graded as follows:

FL: Flawless
IF : INternally flawless (may include surface inclusions)
vvs1-2: very very slightly included, 1 is less included than 2
VS 1-2: very slightly included 1 is less included than 2
SI 1-2 Slightly included 1 is less included than 2
I 1-3 included
Then there is the stuff that belongs on the end of drillbits and sawbladess.



So there are 11 grades and they are guaranteeing you to give you one of the top 10, or better put, your diamonds will not be in the bottom 9%... Whoopty doo.


Then we start talking color, their color description is nearly colorless which is officially G through J color, the actual diamonds pictured appear to be M/N or better, but I see a few that might be in the Q/R range even. (colors are graded D to Z, D being purely clear and progressing darker into a yellowish color, though D color tend not to be available to the average public)

So the stated color is in the top half of quality, though my own eye tells me that that description may be overly generous.

Shape is another concern. Currently princess (square) and Round (brilliant) cuts are all that's in style. Marquise (football shaped), trillian (triangles) and Pears you can barely give away. These packages do not specify shape, I would assume its a variety.

Chipped diamonds are also a concern. a chipped diamond is worth about half or less what an unchipped diamond would go for. I would suspect that some of those diamonds are chipped, since most parcels that come across my desk have a few chipped stones which we have to pull out.

Also the cut is a major concern, depth/diameter ratios are a big deal in the diamond bus, with most diamonds showing the most sparkle at about 62% depth/width ratio. If a diamond is too deep or too shallow it does not reflect the maximum light back upwards to your eye where it is supposed to be so its pretty...


What you are buying here is what we refer to as a mixed parcel. color, size, shape, clarity are all variable within a package, and this is a bad thing, you would need to aggregate 10+ packages to make one cluster ring or engagement band (plus stlll buy a center stone).

What it should be:

For sale 1 ct total weight

Gia certified to be:

size: 4.5 - 5.5 points
Clarity: SI2 plus
color : g-h
Cut: Round
guaranteed no chipped stones
guaranteed no more than 3% deviation from perfect proportioned cut.

the above package is what I would order were I planning to manufacture a small number of say 5 stone wedding bands or 2 1/2 ct cluster rings, or perhaps a really gaudy pendant.

Obviously that would be just 1 example, there would be literally thousands of fungible possibilities, I can imagine about 50 or so different standardized parcels would be popular for regular trade.



Diamonds are bad compared to gold as hard money/investment:

1. they are not fungible
2. they are not divisible (how do you make change for a 1 ct diamond)
3. their characteristics are difficult to quantify, put 2 diamond dealers across a table and watch the fireworks as they determine what it is they are looking at... its fun.
4. they are rare, however they are made of a very common element and it seems reasonable we might make synthetics someday soon (not cz or moisanite but actual synthetic diamond in gem quality, watch the colored stone prices plummet when that becomes affordable, pink diamonds for everyone!!!)

[Hawkeye]

Great information. Thanks!

I'm now curious about synthetic diamonds. I'd heard about the possibility before, but never really heard about anyone actually doing it. It is something that they are close to doing, or is it still in the "it's probably possible, but we can't do it" phase. I'm just curious. This is interesting!

[johnbrickner]

Diamonds, colored diamonds, gems, and gems cooked for color are great subjects. Perhaps it deserves its own spot in our board index.

(grammar edit)

[Copper Member]

I too agree that we need a spot on here for diamonds. I am sure that there are many of you that possess good knowledge on this subject. I myself know very little. On occasion, I pick up rings with better stones in them and in turn send them off for grading at GIA and them have something made into jewelry for my wife or daughter. My latest was a 1.43 Pear Brilliant J color SI1. Very nice looking stone. Not sure what we will have made from it tho. My vote is to have a section for diamonds. Any chance to educate myself is a good thing. Let the experts chime in.

[Hawkeye]

A diamond/gem section would be interesting. I've often wondered about them - how they are graded, what makes them more/less valuable, what to look for, what to avoid, etc.

[frugalcanuck]

I too would like a diamond section. It would be great to know more.

[Treetop]

This seems like such a scam to me. Many of us believe PMs are manipulated but we absolutely know this is true in the case of diamonds. We can sell provident our metals from any source, they sure as heck wont buy your diamonds from another source because they simply are not a store of value in the same way metals are and can also be gotten cheaper then their buy price readily.

I find this very disingenuous. Provident has long been one of my favorite of the larger dealers, an I lost a bit of respect for them with this.

[Treetop]

As far a s a diamond section, I doubt there would be enough traffic to warrant it. A good idea might be something for misc. valuables. From artwork, to baseball cards to whatever else. i bet with all the flippers we have we might see some interesting topics pop up. Of course we do already.

[scyther]

This seems like such a scam to me. Many of us believe PMs are manipulated but we absolutely know this is true in the case of diamonds. We can sell provident our metals from any source, they sure as heck wont buy your diamonds from another source because they simply are not a store of value in the same way metals are and can also be gotten cheaper then their buy price readily.

I find this very disingenuous. Provident has long been one of my favorite of the larger dealers, an I lost a bit of respect for them with this.

I agree to an extent, but they already do this with copper bullion. They're good for silver and gold, but they're not above tricking the unwary into buying junk.

[Hawkeye]

Now that you mention it, I do like the idea of a Misc. Valuables section. That would be interesting. Like a super fancy scrap metal section.

[johnbrickner]

As far a s a diamond section, I doubt there would be enough traffic to warrant it. A good idea might be something for misc. valuables. From artwork, to baseball cards to whatever else. i bet with all the flippers we have we might see some interesting topics pop up. Of course we do already.

A better idea than mine. Kudos!

[cupronickel]

I bought some gems from skoons6694 on the kitchen sink auction section of realcent. They are very cool, and only cost about $30 or $40. Maybe send him a private message and buy some stuff from him.