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Are Pink Diamonds a good investment?

Pink diamonds are one of the rarest and most sought-after gemstones in the world. Known for their striking colour and exquisite beauty, pink diamonds are a symbol of luxury and prestige. Learn now why these gems are the most lucrative investment worldwide. 

We aren’t financial advisors, so we can’t give you any recommendations, but what we can tell you is that since their discovery in 1979, the price of Argyle pink diamonds hasn’t ever dropped (not even in times of financial struggle). It has steadily increased over the past 40 years. Loose Argyle pink diamonds and jewellery made with Argyle pink diamonds can be handed down from generation to generation with no fear of wear and tear due to its natural durability.

History of Pink Diamonds

The first recorded discovery of pink diamonds occurred in India in the 17th century. Over the years, these rare gems have been found in various locations, including Brazil, Russia, and South Africa. However, the majority of pink diamonds were mined from the Argyle Diamond Mine in Western Australia after the first pink diamond was discovered in 1979. This mine was responsible for producing over 90% of the world's pink diamonds, and it is estimated that for every million carats of diamonds mined, only one carat was pink. 

pink diamonds

Characteristics of Pink Diamonds

Pink diamonds are unique in that their colour is caused by a rare geological phenomenon. The presence of a particular type of crystal distortion in the diamond's structure causes the stone to absorb green light, resulting in the pink hue. The intensity of the pink colour can vary, from very light pink to deep, vivid purplish pink. The most valuable pink diamonds are those that have a pure pink hue and are free of any secondary colours such as brown, orange, or grey.

Pink diamonds are graded on the same 4Cs as other diamonds: carat weight, colour, clarity, and cut. However, the hue and saturation of colour is the be all and end all when it comes to pink diamonds. 

The colour grading scale for pink diamonds is different from that of white diamonds. The Argyle pink diamond grading scale ranges from 1 to 9, with 1 being the most intense pink colour and 9 being the lightest.

pink diamond colour grading

Value of Pink Diamonds

Pink diamonds are among the most expensive gemstones in the world. The value of a pink diamond is determined by its rarity and the intensity of its colour. The larger and more vivid the pink diamond, the more valuable it is. Pink diamonds have sold for millions of dollars at auction, and they are often sought after by collectors and investors.

The Argyle Diamond Mine, which produced the majority of the world's pink diamonds, ceased operations in November 2020 and there is no other known source of comparable gems in the world. This closure has led to a further increase in the value of pink diamonds, as the supply of these rare gems has become even more limited.

Pink diamonds have also hit mainstream news, with CNN publishing an article on the ‘Eternal Pink’ diamond that is set to sell at auction for over $35million at Sothebys in June later this year. This diamond was found in Botswana South Africa and is an incredible 10.57 carats. 

Eternal pink diamond

CNN also wrote 

“Pink diamonds have soared in value in recent years. This is due, in part, to a slump in supply caused by the 2020 closure of Australia's Argyle Mine, which previously produced most of the world's pink diamonds. According to an index compiled by brokerage Australian Diamond Portfolio, the average price of the coloured stones jumped 30% in just the 12 months before June 2021.”

Diamond Portfolio also mentioned:

Australian-mined pink diamonds are fast-becoming a popular choice for SMSF investors.

Due to their stable price growth and low volatility, a SMSF can invest in pink diamonds similarly to gold, art and other collectables, as long as they are bought with funds from an account held in the SMSF’s name, at market rates from a separate third-party source.

As with all assets held in your SMSF, there are a number of administration and compliance responsibilities for Trustees who choose to invest in pink diamonds.

melita pink diamond ring

Whether you are a collector, investor, or simply someone who appreciates the beauty of fine jewellery, a pink diamond is a truly special and precious possession. With the closure of the Argyle Diamond Mine, the value of pink diamonds will continue to rise, making them an excellent investment opportunity.

Jewels of the Kimberley is the largest stockist in the West Kimberley of Argyle pink diamonds and would love to assist you in purchasing loose pink diamonds or having a custom piece of jewellery made. 

Contact us today for a 1:1 consultation and to view our exquisite range. 

***Please note, the information in this blog is a reference only, and does not represent financial advice. Be sure to consult your Financial Advisor/SMSF advisors and/or do your own research so as to fully understand the requirements and obligations.