Diamonds or a holiday?

The diamond market is storming back, but there are more threats to the market.

-  David McKay

Given the choice and the money, which would you prefer: a holiday in the south of France or a new diamond? In the grip of winter, the idea of gently sipping a Grand Cru Bourgogne in the Mediterranean sun sounds better than the allure of cold, white jewellery, regardless of the occasion (or even the love).

According to a Morgan Stanley report, “doing stuff” trumps “getting things”. Experience beats ownership, especially to a Covid-19-blighted society where life is temporary. This is one of the reasons why the bank thinks the much-anticipated recovery in the diamond market may have limited upside.

On the face of it, the diamond market is storming back. De Beers recently hiked high-value rough diamond prices, the stones it sells to polishers and cutters, by around 10%. Its sales in 2021 are $2.5bn, the most since 2018, and are estimated by Goldman Sachs to comprise 6% of Anglo American’s 2021 earnings before interest, tax, depreciation and amortisation. (Anglo owns 85% of De Beers).

Its CEO, Mark Cutifani, has told