Diamonds Or Gold: Which Makes A Better Safe-Haven?


Are diamonds the new safe-haven hedge against volatility? This Singapore’s exchange thinks so.

Singapore Diamond Investment Exchange (SDiX) has introduced a credit card-sized package of diamonds for those risk-off investors who want to protect themselves against any market instability.

“A diamond has absolutely zero correlation with any other asset class, whether it’s commodities, bonds, equities. It’s a store of wealth, it’s a hedge against volatility and you need that in your portfolio,” Alain Vandenborre, executive chairman of the exchange, said on Tuesday.

The new format allows traders to invest in diamonds as they do in gold.

“Until now, there was no way people could invest in diamonds in the form which is equivalent to investing in gold,” Vandenborre pointed out.

The exchange attempts to simplify diamond investment by selling what it calls Diamond Bullion — sets of investment-grade polished precious stones that come in denominations of about $100,000 and $200,000 each.

Vandenborre recognizes that diamond investment can be complicated, as all gems are different in color, cut, clarity and carat. But, he is certain that with the Diamond Bullion, precious stones can be the “new gold.”

The precious stones offered on the exchange are issued by the Singapore Diamond Mint Co. and are sourced from the wholesale market through De Beers and Alrosa. All gems are also in the top five levels of color and clarity, Bloomberg quoted Vandenborre as saying.

The SDiX plans to expand its product in the future by listing other denominations as well.

As of now, the Diamond Bullion is tradeable, with real-time pricing available online, according to the exchange.

SDiX was launched in May 2016 as “the world’s first fully electronic diamond exchange.”