Diamond Prices and DeBeers Ltd

Posted on Thursday, May 24th, 2018 at 10:00 am by LaLonde

So, I am hell bent on figuring out when the first diamonds were found. Most documentation credits India in the beginning of the 4th century B.C. It appears that in 1725 Brazil discovered diamonds then in the 1860’s South Africa started producing diamonds.
You see it appears that diamonds were pushed up through volcanic activity and were spewed down tracts on the side of the volcano. Over centuries the volcanoes were weathered down by wind and rain to rolling hills. The stones tumbled down water ways and became known as allvivial diamonds. This happened over many millions of years. So, you can see that many peasants and average people may have come across these stones with no idea of what they even were.
My conclusions are that there is no way of telling when someone saw them first. Remember diamonds are over several million years old. Maybe a Neanderthal or Homosapien who knows. It only becomes important when someone recognizes its importance.
When the human mind was able to realize the stone was harder and more durable than any other they had encountered I would think their minds would be curious.
So, they at some point began to trace the source and that is what brought us back to India where it is believed the first mining began. The Mongol leaders were some of the first to start gathering diamonds in quantity. Then the monarchs of Europe all got in on the action.
Now I have a book in my library that was printed in 1874. It was written by Louis Dieulafait a French professor of physics. He did some calculations on diamond prices. He formulated a chart of diamond prices in

As you can see the supply was low in 1608 and prices were high. In 1750 Brazil started producing so supply was great, so prices went down. In 1865 diamonds were found in South Africa, but demand was going up, so prices increased. This great fluctuation in supply and demand is what lead to DeBeers Consortium to be developed to control supply and demand.
I became a gemologist in 1979, that year interest rates were greater than 18%. Inflation was rampant, and the dollar was going into the tank. People were investing in gold and diamonds. A 1cts D, flawless diamond shot up from $16,000 to $64,000 per carat. DeBeers slowly increased supply for these investment stones but were very careful knowing that an oversupply would cause a dramatic crash on the diamond industry. It took about 1 ½ years to balance supply and demand. You can thank DeBeers for saving the diamond industry. Today a 1cts D, flawless is about $20,000 per carat.
Every known commodity and item works on the supply and demand philosophy. Look at something in your life that you know a lot about and you will find the ole supply and demand.
Written by Dan Lalonde
Lalonde Jewelers
The Gem Expert

For the most recent Gem Quiz and Featured Item, click here to view the emailed version of this newsletter.



Tags:
LOADING...