Along with being timeless keepsakes, gold and diamonds can have quite a bit of value. Many investors find diamonds and gold to be safe and smart investments. Although both diamonds and gold can give you a good return, it’s important to make sure you understand what investing in them entails. Learn the answers to some of the most frequently asked questions about investing in diamonds and gold.

What Is Commodity Investing?

A common type of commodity investing is when you purchase physical raw commodities and plan to sell them later. Different types of investment commodities include metals, energy, livestock and meat, and agriculture. When investing in commodities, you should plan for different variables such as economic developments and innovations. For instance, when investing in gold, you should pay attention to current currency rates and trends.

What Are the Benefits of Commodity Investing?

Unlike money, commodities tend to be safer during times of economic uncertainty. That’s because precious metals, such as gold, tend to be reliable despite volatile stock markets. Likewise, your gold assets may be more valuable during periods of high inflation.

One thing to keep in mind is that commodities can be risky investments since their prices fluctuate. When you sell your gold at the right time, you may get a nice return. Another benefit is that you can easily hold onto gold until it becomes more valuable.

What Are Key Factors for Investing in Diamonds vs. Gold?

When considering investing in diamonds or gold, there is no simple answer to which option is better. It truly depends on your personal preferences and financial background. When investing in diamonds, consider the following factors:

  • Quality of diamond: You need to make sure you are purchasing high-quality diamonds. Consider the color, clarity, cut, and carat of the diamonds you are purchasing.
  • Diamond terminology: Become an educated buyer by learning about different diamond language. Research the 4 C’s (color, clarity, cut, and carat) of diamonds, and look into the value of different colored diamonds.
  • Type of diamond: As trends change, the market may demand different types of diamonds. It may be wise to invest in a variety of diamond types to improve your chances of high resale value.
  • Certification: Make sure you receive a legitimate certification when purchasing your diamonds. This ensures you are getting an asset of fair value.
  • Mounting: When its time to sell your diamond, you may not get a return on your mounting (if applicable). However, if your diamond is mounted to a high-quality gold ring, you may also get a return on the gold.

Consider these factors when investing in gold:

  • Purchase physical gold: Rather than buying gold on paper, choose to purchase actual gold and keep it in your possession. This way, you are protected from gold shortages and can see exactly what you own.
  • Unencumbered ownership: Make sure you are the sole owner of the gold. When buying your gold, make sure the company you are buying from has no rights over your assets upon purchase.
  • Buy from trusted sources: Purchasing gold on public online market places can be risky. Instead, purchase from a trusted retailer.

What Is Worth More: Diamonds or Gold?

diamond ring with gold bandImage via Unsplash by dylu

Whether gold or diamonds are worth more depends on a variety of factors. First of all, there is no set price for either of these assets since the demand for both constantly fluctuates. Gold tends to be a safe investment since it is known to withstand inflation and has a reliable return. In certain parts of the world, gold is considered a form of currency, which is not true for diamonds. In this sense, gold could be worth more than diamonds.

On the other hand, diamonds often have a better resale value, making them worth more when considering this factor. The key is investing in quality diamonds that rank favorably in each of the 4 C’s. When purchasing diamonds, make sure you are working with a reliable retailer who is willing to give you an honest and fair price.

What Are the Pros and Cons of Investing in Gold?

When investing in gold, there are pros and cons. One advantage is that gold is protected from market risks such as political conflict, terrorism, trade wars, and cyber threats. Gold tends to be safe from inflation, and it holds its value for long periods of time. When purchasing gold coins, it’s relatively easy to sell them later on.

One challenge you may face is verifying rare or old gold assets. Another drawback may be storing gold coins and bullion. Before investing, make sure you have a secure safe that can fit your gold.

What Are the Pros and Cons of Investing in Diamonds?

Diamonds can be a great commodity investment for a variety of reasons. One obvious reason is that diamonds don’t take up much space. You can easily store them in your jewelry box or a small safe. When you’re ready to sell your diamonds, you can easily transport them. Another benefit is that diamonds are quite durable. Unlike many other precious gems, diamonds don’t break or wear down easily. That’s because they’re the hardest naturally occurring substance on Earth.

When you invest in diamonds, you can also enjoy your investment. You could wear them in different jewelry, like rings, earrings, or necklaces. You can also appreciate that diamonds are a tangible item you can hold in your hand, unlike most investments that are just numbers on a screen. Diamonds are also inflation-proof, making them a safer investment choice during uncertain economic times.

Now that you know a little more about investing in gold and diamonds, you can see that both of these commodities have many benefits and some drawbacks to consider. You may decide that one option better suits your situation or that investing in both gold and diamonds allows you to get the best of both worlds. When you’re ready to buy or sell any gold or diamond assets, AaLand Diamond Jewelers has you covered.