Can i exchange my diamond for another at a diamond exchange?
When I first heard of a diamond exchange, it was confusing.
I thought it was a shop or a practice where you go and exchange diamonds.
That sounded really cool since I could change the look of my girls’ diamond engagement ring whenever she got bored of it. Sadly for me, that was not the case.
Diamonds are traded as commodities & futures similar to wheat, sugar, corn & rice in a diamond exchange or a Diamond Investment Exchange which is a publicly traded company.
Some of the exchanges are independent companies, some are part/subsidiaries of other companies while other are even traded on the NASDAQ markets.
Diamonds are traded on the futures index as cash tenders, these include high quality diamonds.
These diamonds have diamond grading reports from the Gemological Institute of America (GIA) & the HRD which represents the Belgian diamond sector.
These inform the diamond traders, investors, buyers and sellers on the current diamond demand vs. supply.
When trend lines go up, they indicate that investors are buying diamonds & it is a good time to do the same for you as prices tend to be low.
When the trend line goes down, it indicates that investors are selling diamonds and it would be a good time for you to do the same to maximize on your profits as prices will tend to be high.
These exchanges provide investors, consumers, seller and buyers an alternative way to invest in diamonds.
The futures index also benefits the diamond industry with increase consumer confidence, diamond leasing programs and cash market liquidity.
This is provided that all the players who participate in the exchanges with potentially high returns on their investment.
Does an Exchange offer any practical value? Yes it does!
It provides diamond traders with a stable source of certified diamonds from the most recognized associations & labs globally.
These labs consistently & accurately grade diamonds and diamond customers trust them.
The exchanges also provide retailers with a convenient way to buy diamonds.
Having said that, not all diamond retailers use the exchange.
Since the prices on the exchange are set, there is little room for negotiation & those opting for higher profits at the risk of quality & value look elsewhere.
For the diamond seller, the exchange offers them expertise in trading the market & assists them in marketing & selling their stock for the best possible return.
Oh??I almost forgot to mention that a conventional exchange dealing in diamonds does not stock diamonds.
They offer a service and make a commission or charge you an upfront fee.