Why are diamonds so expensive

Day 106 / 365

Diamonds have been synonymous with wealth for ages. It’s the most popular gem stone. In the west especially, the size of the diamond on your engagement ring is seen as representative of your social status. But what makes diamonds so precious?

Are diamonds rare?

That’s the first reason people go to to explain why diamonds are as expensive as they are. And it was true for most part of our history. Diamonds were rare to find. But it’s not true today. In fact as compared to other gem stones, diamonds are most commonly found.

Controlled Market Supply

In the 19th century a new diamond mine was discovered in South Africa. This mine would have lead to a large increase in the supply of diamonds, thus bringing the price down. This is why De Beers, worlds largest diamond company, bought the mine and restricted the supply. Thus they maintained the misconception that diamonds are rare, and were therefore able to keep the prices high.

Diamonds and wedding rings

Using diamonds in engagement rings is a relatively recent trend as well. It was basically a marketing campaign employed by the De Beers company in 1938. The used the slogan “Diamond is Forever” to show diamonds as a symbol of love and even started the rule that a man should spend a quarter of his annual income to buy an engagement ring.

By the end of the 20th century, 80% of all brides had diamond rings.

This post is part of my 365 Day Project for 2019. Read about it here

Yesterday’s blog — Dale’s Cone of Experience