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I just wanted to get some opinions on an amazing factoid I learned the other day, and see if you guys are as outraged and baffled by it as I am.
A guy who I'm training at the gym (I'm a personal fitness trainer) works for the USGS here in Austin. He has his Master's degree in Geochemistry from Rice University and has been working in the field for about 12 years. He has been on five of the seven continents plying his trade and serving as a consultant to various energy exploration & drilling comapnies.
He told me this: The general public and consumer has been lied to for many years about the value of diamonds. They are not really a precious stone, and in fact are very, very common. After all, they simply come from pressurized carbon, which is one of the most prevalent substances on the planet. Diamonds, he said, turn-up all the time when they drill for CBM (coal bed methane, which sits on top of the coal beds) as well as oil. As far as their value, he said, diamonds are actually far, far, cheaper to process than other "precious" stones like rubies, sapphires, emeralds, and topaz. He went on to say that in reality diamonds should be priced along the lines of turquoise.
We have all been duped for many decades. Energy exploration companies are paid by diamond wholesalers to keep their mouths shut about what they find, and then are also subsidized for their drilling costs by these diamond buyers.
What say you?
While not rare per se, the majority are not gem quality stones.
However, it is a very controlled market and prices are kept up simply by not releasing more to the market than necessary to maintain the desired 'value'.
Search "De Beers" for an interesting read on the history and workings of this unusal market.
Diamonds are not rare. Not only are there a lot of diamonds on the market in new jewelry, there's also a great amount of diamonds in antique/estate jewelry in shops... plus whatever diamonds are currently already owned by regular people.
However, with diamonds the most prevalent ones are small ones of lesser gem quality and lots of industrial grade diamonds for use as abrasives and in drill bits. What are the rare diamonds are large ones that are naturally internally flawless and of the whitest colour. Or ones that are naturally coloured. It's all about the clarity, colour, how large a carat and how the gem cutter has been able to cut the stone to make it sparkle the most. The best stones are what set the market price. After than the lesser stones are graded accordingly.
And the other factor in pricing jewelry is the amount of precious metal the diamond (or other precious stone) is mounted in, the time it takes to make the jewelry item, then finally the cost of selling and marketing the piece (store rent, utilities, and employee compensation).
For the best diamond or jewelry value, always buy a used piece of jewelry, preferably from a private party. It's just like buying a car... never buy a new one. Don't get sucked into the marketing hype.
I love antique diamond and platinum jewelry, no matter what the fashion trends are doing. I didn't need a marketing campaign to fall in love with my mother's antique Tiffany diamond and platinum engagement ring. I also collect antiques and enjoy fashion clothing. As a child, I was taken to many museums, I love things that are made well and well designed. I see nothing wrong with enjoying and owning beautiful objects. But beauty is in the eye of the beholder, and to each their own. And as long as my bills are paid, I see nothing at all wrong with indulging my collecting habits. Life is too precious and short not to be able to do what I want with it.
I also buy very wisely and my collection is one way of investing in myself. One day, if I need the money, I can always cash out my collection. Being 52 years old, I feel comfortable that within my lifetime, my jewelry will still appeal to most. Gold and silver are way in value from 15 years ago. And my collection holds its value far better than those buying new cars, Ikea furniture and smartphones. Shrug.
While your friend if correct that diamond - pure carbon crystalized - is not that rare, in fact it is rather common and found all over the world, it is the gem quality ones that are hard to find. Cloudy, milky, heavily flawed diamonds that are gray or brown or black make up about 95% percent of the diamonds that come out of the mines.
It is true that fine quality Ruby, Emerald, Sapphire or even Opal is much rarer than diamond.
Your friend may have a degree in Geochemistry, but I have a degree in Gemology from the Gemological Institute of America. Diamonds are NOT found in coal mines. In order for carbon to crystalize it must be formed over millions of years in the core of the earth and these crystals are pushed up volcanic veins or pipes to the surface. The host rock diamonds are found in is called Kimberlite (named after the discovery of diamonds in the Kimberly mine in South Africa); coal is not the matrix of diamonds.
I am not trying to defend diamonds ... far from it! I agree with you they are way overpriced and something of a scam if you will. They are one of the most brilliantly (pardon the pun! ) marketed products in the world.
If diamonds have anything to admire about them it is not the stone itself but the skill and expertise of cutting and polishing a diamond. That is what you are paying for. A skilled diamond cutter or lapidary has trained for years and a well cut diamond has to conform to exacting angles and proportions. Yes, diamonds can break or shatter during the process, and this craft is highly specialized.
It's not just the diamond that is desirable, it's the jewelry that it's set in. There is great artistry and beauty in the total package. Diamonds just sparkle really well. The best quality diamonds are really quite stunning. But the best quality diamonds are rarer and therefore more expensive in price. And precious metals like platinum and high karat gold are pricey. Then add in the labour to make the jewelry... etc.
Large diamonds of over several carats in weight that are high quality will always be greatly valued all over the world. Check out the blue Hope Diamond at the Smithsonian. Go visit any museum with ancient artifacts and you will see that mankind has a long love for gold and jewelry. Or check out the jewelry collections of royalty from all cultures, and there will be diamond and other really fine jewelry in them.
Lesser quality diamonds and lower karat gold (14kt, 10kt, 8kt) and sterling silver are used to make jewelry those with lesser income can afford. And wearing some jewelry is a nice way to adorn oneself as a female or male. Most people like to wear a necklace, bracelet or earrings.
While there are rarer gemstones, diamonds are the more practical choice for daily worn jewelry. It's a very hard stone and a white diamond is neutral in tone, so works better when the wearer is wearing clothing of different colours.
What is a real racket is the trend of putting tiny diamonds all around watches. The diamonds used are small and of poor quality. They are single cut diamonds, not full cuts. But these watches are priced high and then a few given to celebrities in order to trick the public to thinking that it's the hippest accessory to have. Many times the watches themselves are of poor quality and people are buying them only for the bling factor. And after paying hundreds, if not thousands of dollars for these blingy watches, their resale value is close to zero.
Maybe there is some grand conspiracy concerning diamonds and their value. I don't know anything about the diamond market.
But there are a couple of things I do know related to it. One is that prices are typically what the market will bear. If people weren't willing to pay what they are for diamonds, they wouldn't.
Secondly, drummerboy makes a point that the guy he's training in a gym says that diamonds are commonly found while drilling for CBM and oil, and that may be. I don't know. But, I do know that there is a wide variation in the quality of diamonds. I have to use industrial grade diamonds a lot in my work. While they may chemically be structured as diamonds and technically be diamonds, they bear little resemblance to what is in my wife's jewelry. And, having seen raw diamonds of both industrial grade and jewel grade, there wasn't a lot of similarities in them, either.
So, while diamonds may be common, and commonly found, could it be that the grade suitable for jewelry is relatively rare?
One last thing--price is not determined solely by the rarity of an item, but also by how much it is valued. It would seem that more people value the look and appearance of diamonds than other gem stones.
I say, have you been living on another planet? This is common knowledge, has been for decades upon decades. It started out as marketing genius "a diamond is forever..." blah blah blah. Anyone who doesn't know the whole thing is just a scam for money has been living under a rock.
Look into the history of the De Beers company, and the diamond buyers' trade, and you'll see what I'm talking about. The De Beers company started the whole campaign about a diamond being the best "gem" for an engagement ring, it was all marketing. They've convinced the public that a guy doesn't love his fiancee unless he spends beaucoup bucks on a diamond.
Now, how do the diamonds become so expensive? Well, the De Beers company sets the price. There is no dickering. Only a few people are selected to be diamond brokers who can buy directly from De Beers. Those brokers supply most of the world's diamonds. Those brokers are each given a packet of stones, which they cannot examine before purchase, and they are told the price that they will pay for those stones sight unseen. If the broker refuses, then they are not "invited" back again, ever, to buy from De Beers and they are pretty much ruined as a diamond broker.
So, they pay for the packet. If the De Beers representative doesn't like the broker, he can get shafted on the contents of his package with no recourse, because if he complains...he doesn't get to buy diamonds anymore. It's a huge scam. The De Beers company is one of the most vile and corrupt corporations in the world. I have nothing but contempt for them.
Not only that, diamonds just aren't that interesting. Colored gemstones are far prettier.
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) marketed products in the world. 
