Diamonds are Forever

The world’s favourite precious stone hasn’t lost its sheen despite rising prices and seeming lack of investment value. We bust a few myths surrounding the big ice

“But square-cut or pear-shaped, these rocks don’t lose their shape…” crooned Marilyn Monroe famously in Diamond’s are a girl’s best friend, in the movie Gentlemen Prefer Brunettes, in 1953. Six decades later, post several economic crises, women’s emancipation, feminist movements and leaps and bounds taken by the jewellery business worldwide, we wonder if the world’s most popular stone still holds the glitter that it’s famed for.

In the last century, no other precious stone has held sway over larger public imagination than the diamond. There are multiple reasons why diamonds are so popular. It’s the only colourless stone that sparkles in its simplicity, yet is so brilliant. It is rare. It signifies rom-ance and eternal love. It heralds social arrival, if you can afford it. Most importantly, a targeted and sustained marketing campaign by the world’s diamond and trading companies, promoting diamonds and its association with rom-ance, ensured its place as one of the ‘must have’ luxuries, sending it percolating down to the middle classes and creating a large consumer base.

We try to explore the sparkle behind the UAE’s diamond market and trade, and what keeps it a perennial favourite, the Kohinoor of all stones, while busting some myths and common misconceptions about the stone, and what you should keep in mind while purchasing that long-desired solitaire.

All that glitters…

The UAE is one of the largest trading and marketing centres for diamonds, and Dubai in particular happens to be the third largest trading hub for the stone, having reached top volume 
figures in carat sales, and also import and export. “During the last decade, the Emirate has successfully joined the ranks of leading international diamond centres such as Antwerp, New York and Mumbai, and has been recognised as one of the world’s top four diamond trading centres,” according to the Dubai Diamond Exchange’s official statement. “Today, diamonds represent over 50 per cent of the jewellery trade in Dubai. In 2010, total diamond trade volumes in Dubai reached a record value of US$35 billion.” In the Gulf, Dubai accounts for 20 per cent of the region’s retail business in diamonds.

Major jewellery retail brands are also expanding their diamonds business, giving it a new preference over the traditional gold segment. Recently, Pure Gold Jewellers budgeted for a $75 mill-ion expansion across different countries. Karim Merchant, CEO of Pure Gold Jewellers, stated that the company was designated as a superbrand for the fifth year in a row, by the UAE Superbrand Council.

Diamonds are not always rare, but they’re running out

What? Haven’t we always heard that the reason the stuff costs as much as your three months’ worth paycheck and more is because it’s rare? Not alw-ays. It’s not always rare in natural occurence, but the number of functioning diamond mines are limited, and they’re fast being stripped of their wares. “De Beers, world leaders in the mining and trading of diamonds, controls rough diamond supply. As the number of mines are limited, such a step is necessary to ensure the supply and flow of diamonds for at least the foreseeable future,” says Abdul Salam K P, group executive director, Malabar Group of Companies, which owns the highly successful Malabar Gold and Diamonds.

To get quality diamonds, you have to dig at least 180 kilometres down, and even then, raw diamonds can only be mined at the right pressure: do it the wrong way, and the diamond can actually turn back into carbon! “Be aware that what you’re wearing was created over a billion years ago, under the earth. That alone is a reason to treasure it,” says Abdul Salam.

“Think of it like crude oil,” says Darshan Shah D, director of N Gopaldas Jewellers, the fourth generation member of a family-run business, also relatively new entrants in the UAE market. “It might run out, sooner or later, we don’t know; which is why it’s important to promote and market the diamond trade, and also emphasise its value and rarity.” The inherent value of diamonds is also in the four famous fundamental principals of cut, colour, carat and 
clarity. The higher these are, the rarer the stone.

“Diamonds have no resale value”

This is the biggest misconception among customers, say various diamond jeweller majors and even the small independent businesses. Think gold is the only shiny thing you can sell for good money? Think again. “It’s a misconception we’re constantly striving to fight,” says Abdul Salam. “Whatever guarantee we offer against our gold jewellery, the same assurance is given on our diamond jewellery too. We have some of the best buyback policies on diamonds, and occasionally do an exchange promotion.”

With the right certification and proof of purchase, you can even take your old diamonds or diamond jewellery to most reputed retailers, and they are most likely to offer a cash purchase, after conducting quality tests.

“While it’s true that diamonds aren’t as liquid as gold, at times they can 
fetch you even twice the value you purchased them for depending on quality, the original seller and certification available. On average, the value of diamonds are appreciating at 2 to 3 per cent every year,” says Shah of N. Gopal-das Jewellers.

This is only a win-win situation for everyone. It means diamonds are now no longer an empty investment worthless after you wear it. For instance, check out one jewellery major’s buyback terms: In case of cash back or exchange against gold jewellery, the valuation of returning stock would be either (a) 70% of the total invoice value or (b) 96% of the prevailing gold value + 70% of the prevailing diamond price, whichever (a or b) is higher.

So if you have unwanted diamonds at home, don’t despair; you can always sell them back to the jeweller you bought them from, or for an even better price if your rocks make the cut.

Diamonds are not always expensive

Yet another popular misconception among buyers. You don’t need thousands or millions of dirhams to be able to afford your first set. There are various ways to make them affordable. Buying loose stones and designing your own jewellery is actually more cost-effective than buying pre-
designed ones. Most major jewellery retailers will give you that option these days — just like the family jeweller — but ensure that your favourite design turns out just the way it did in that glossy magazine, thanks to the technology and resources bigger brands have at their disposal.

Another insider tip we have for you: don’t always go for the diamond jewellery that is heavily marketed and keeps popping up in advertisements or city hoardings. That stunning necklace you saw in your favourite magazine may leave you in tears at the price. Just a visit to the showroom, and you’re likely to find something far less pricier and equally pretty, if not grand.

Buying loose stones also means you can afford higher carat stones, rather than paying more for workmanship and brand/retail charges for readymade jewellery with lesser carat value stones. Now, you can go for that 1 carat solitaire!

Look out for certification

Most jewellery brands still offer internal certifications. While these are good enough if the brand is reputed, be aware that GIA (Gemological Institute of America) certification is what you need while buying loose diamonds, and IGI (International Gemological Institute) is the seal you should look out for in diamond-set jewellery. The 4Cs — cut, colour, carat and clarity are the popular hallmarks — and these 
certifications ensure them.

ringing sales

While no specifics or trends were 
attributed to the UAE market by the jewellers we spoke to, most of them agree that in terms of number of pie-ces sold, diamond engagement and wedding rings top the list. But in terms of volume, diamond necklaces, bracelets, and ear studs are the most popular items, overshadowing engagement and wedding rings.

Different nationalities prefer very different designs here, say both Shah and Merchant. Very few trends overlap for the UAE as a whole. Asians and 
Arabs tend to prefer yellow gold set with diamonds, while Westerners go for white gold or platinum, with the diamonds to be highlighted.

DIAMONDS, A GIRL’S BEST FRIENDS

Diamonds are likely to remain a 
perennial favourite worldwide. Unlike gold, prone to constant price fluctuations and variable preferences around the world, diamonds are universally loved. “Their inherent beauty, indirect association with royalty and aristocracy in the past, and the innate desire that diamonds create in you to want them will always work in their favour,” says Shah.

Whether gold prices rise or not, the future of diamonds remains bright and refractive; that is the general consensus of jewellery majors. “All over the world, people are growing conscious of the value of natural diamonds, and as they earn more, they’re going to invest more in them, maybe even on par with investment in property. Because when you invest in something of high quality, it never fails to give returns,” signs off Shah.

marypaulose@khaleejtimes.com