Executive Summary

• Gold experienced unprecedented volatility in 2025, reaching historic highs before facing significant corrections
• Multiple macroeconomic and geopolitical factors created complex market dynamics
• Major financial institutions maintain bullish long-term outlook despite short-term volatility

Key Performance Metrics

• Peak Price: $3,500+ per ounce (April 22, 2025)
• Year-to-Date Gain: 32% increase from January 2025
• Rapid Appreciation: $500 increase in 5 weeks (March-April 2025)
• Maximum Correction: 12% decline to $3,130 per ounce (mid-May)
• Current Range: Trading above $3,300 per ounce

Primary Market Drivers

Political/Policy Factors

• Trump administration tariff policies and executive orders
• Trade negotiations with China and EU (50% tariff imposed)
• Federal Reserve vs. Presidential conflict on interest rate policy
• US trade court rulings blocking “Liberation Day” tariffs

Geopolitical Tensions

• Ongoing Ukraine-Russia conflict
• Israel-Gaza military operations
• US-Houthis skirmishes (later ceasefire)
• India-Pakistan “Operation Sindoor” conflict

Economic Fundamentals

• Weakening US Dollar (index fell below 100)
• Mounting US national debt ($36 trillion, potential $4 trillion increase)
• Global stock market decline (Dow: 37,000 to 42,000 recovery)
• Bond market stress (30-year Treasury yields at 5%, highest since 2023)

Institutional Analysis & Forecasts

Major Bank Predictions (End 2025)

• JP Morgan: $3,675 average, $4,000 by mid-2026
• Goldman Sachs: $3,700 (with $6,000 by 2029)
• UBS: $3,500 (conservative estimate)
• Bank of America: $4,000

Investment Demand Indicators

• Continued central bank purchasing globally
• Increased ETF demand
• Moody’s US debt downgrade (AAA to AA1) supporting safe-haven appeal
• Chinese capital flight from US markets

Competitive Precious Metals Analysis

• Silver: Struggling below $35/oz despite $40 predictions, confined to $33-34 range
• Platinum: Two-year highs with 10% weekly gains, supply shortage concerns (1M oz deficit forecast)
• Palladium: Underperforming, vulnerable to recession impacts
• Bitcoin: Recovery from 76,000 to 102,000+ following federal reserve establishment

Risk Factors & Challenges

Economic Risks

• Recession probability due to tariff uncertainties
• Federal Reserve hawkish stance preventing rate cuts
• Inflation concerns from trade policies
• Weak US Treasury bond auctions

Market Volatility Triggers

• Policy flip-flops on trade tariffs
• Geopolitical ceasefire announcements
• Currency index fluctuations
• Court challenges to administrative policies

Strategic Market Developments

Regulatory Changes

• India: Mandatory hallmarking expansion for gold jewelry and bullion
• United States: Florida accepting gold/silver as legal currency
• Global: Enhanced standardization initiatives

Corporate Responses

• Apple relocating computer manufacturing to India to avoid tariffs
• Supply chain restructuring due to trade policies

Investment Thesis & Outlook

Bullish Factors

• Persistent geopolitical uncertainties
• Fiscal sustainability concerns
• Currency debasement risks
• De-dollarization trends
• Strong institutional demand

Bearish Risks

• Interest rate policy normalization
• Geopolitical conflict resolution
• Economic recession impacting all assets
• Trade policy stabilization

Strategic Recommendations

For Portfolio Managers

• Consider gold allocation as hedge against policy uncertainty
• Monitor Federal Reserve policy divergence signals
• Assess correlation with other safe-haven assets

For Risk Management

• Track geopolitical event calendars
• Monitor US fiscal policy developments
• Evaluate currency exposure implications

For Corporate Strategy

• Assess supply chain vulnerabilities to trade policies
• Consider precious metals exposure in treasury management
• Evaluate geographic diversification strategies

Conclusion

Gold’s 2025 performance demonstrates the asset’s continued relevance as a hedge against systemic risks, despite increased volatility. The convergence of political uncertainty, fiscal concerns, and geopolitical tensions creates a complex but potentially favorable environment for precious metals investment strategies.

In a year when the traditional diamond market is under pressure, a dazzling niche is quietly rewriting the rules of luxury investing: fancy color diamonds. From the cerulean depths of the “Mediterranean Blue” to the rarest blushes of pink, these gems are captivating collectors, connoisseurs, and investors alike—proving that true beauty, especially when rare, never goes out of style.

A Market Apart: The Allure of Rarity

While white diamonds are facing plummeting prices and dwindling demand, fancy color diamonds are enjoying a renaissance. Just last week, Sotheby’s sold the 10-carat “The Mediterranean Blue” diamond for a staggering $21 million, underscoring the robust appetite for these vibrant stones.

With fewer diamonds being mined every year, access—not just choice—is becoming the new luxury. Investors are increasingly turning to fancy colors because fewer and fewer diamonds are being mined today. We are approaching a point where acquiring a fancy color diamond will no longer be about choice, but about having accessThese diamonds continue to stand out as the ultimate way to preserve and protect wealth. They have always been a remarkable investment, and as time goes on, this asset class only proves its stability and long-term value.

Pink Diamonds: The Ultimate Trophy

Among fancy colors, pink diamonds are the uncontested queens. Their supply has been dramatically reduced in recent years. The legendary Argyle mine, once the world’s largest source of pink diamonds, closed in 2020. Sanctions on Russian diamonds have further squeezed the market, particularly for purples and other rare hues from the Sakha Republic.

A recent GIA survey of 90,000 certified fancy color diamonds revealed that a mere quarter of pinks possess the coveted Type IIa purity—diamonds virtually free of nitrogen, often with an ethereal glow. The rarest pinks, like those from India’s Golconda mines, owe their color to nitrogen, while the vast majority—99.5%—are colored by “plastic deformation,” a phenomenon where immense subterranean pressure creates those signature graining lines and breathtaking shades.

The Investment Case: Beauty, Rarity, and Resilience

As global uncertainty grows, fancy color diamonds are emerging as a new safe haven for wealth. Their price performance, scarcity, and timeless glamour make them irresistible. Auction houses are seeing healthy, stable demand, and private sales are thriving. The urgency to secure these gems is palpable, with buyers increasingly viewing them as both wearable art and a shield against volatility.

The Verdict

In an era where rarity reigns supreme and beauty is an asset class, fancy color diamonds are more than just jewels—they’re a statement, an investment, and a legacy. For those seeking the ultimate in exclusivity, the message is clear: the time to fall in love with color is now.

Russell Mehta reflects on the diamond industry’s evolution, noting a shift from romantic experiences to transactional purchases due to increased transparency and lab-grown alternatives. While the market faces fluctuations, natural diamonds retain intrinsic value, rarity, and emotional significance, distinguishing them from commodities like gold.

Consumer perspectives have shifted significantly over the 40years that I have been in the diamond business. When I started out in the early 1980s, buying a diamond was a romantic, emotional experience. Its mystique was linked to its rarity, its perceived uniqueness, and the joy of discovery during the shopping process. This traditional view of diamonds has shifted with the rise of certification, transparency, and the accessibility offered by the internet. The diamond market has become more commoditized, where consumers can compare prices, examine flaws, and get a better understanding of what they are buying, often without stepping into a store. The process of acquiring a diamond, once filled with romance, has become increasingly transactional.

Recent reports have raised doubts over diamonds as viable investments, often comparing them to gold or other financial assets. Unlike other luxury items, such as designer bags, diamonds’ value comes from a combination of art, history, and sentiment—an acquisition that can be passed down through generations. I own a diamond from my grandfather, and its value to me is immeasurable; no price tag could ever capture its significance.

Unlike gold, with which diamonds are erroneously compared to, or art, diamonds occupy a middle ground. While not as liquid as gold or as illiquid as art, natural diamonds retain intrinsic value over time.

For example, I have collected numerous works of art, but only a handful have appreciated significantly over two decades. This unpredictability does not make the art any less valuable to me, but it highlights the varied nature of investments. I cherish the stories behind my art collection—how I discovered each artist and acquired each piece alongside my wife. That does not mean diamonds do not serve as a form of security in times of crisis. History has shown that in turbulent moments, diamonds have been portable assets that can be used to re-establish stability.

The value of diamonds can fluctuate, but it doesn’t depreciate—nor does it get damaged—as quickly as other commodities. According to a Bain & Co report, on an average, prices have increased by 3% year-on-year over the last 35 years.

The rarity of natural diamonds will only grow, as their supply is limited. No significant new diamond deposits have been discovered in the past two decades and the current mines are gradually depleting. The natural pink diamonds that the Argyle mine in Australia produced over 30 years, for instance, are now coveted collectors’ items, providing extraordinary returns as the Argyle mine is now closed.

The introduction of lab-grown diamonds has added a layer of variety to the industry. These diamonds, created in a controlled environment, are more affordable and abundant compared to natural diamonds. While they share the same physical properties, they lack the rarity, preciousness, and emotional weight of natural diamonds. They follow Moore’s Law—as technology improves, their production becomes cheaper, their quality better, and their size larger—further reinforcing their status as a manufactured commodity, rather than a unique and naturally-available gem.

Their rise reflects the broader trend of commoditization in the diamond industry. Some consumers may be drawn to the lower price point of lab-grown diamonds. For example, it may work for the 25-27 year-old on his—dare I say—first marriage proposal. But for his 10th wedding anniversary, his gift would be the real thing, a natural diamond.

After an unprecedented boom in 2021 and 2022, the market has contracted, with the value of global retail-studded diamond jewellery declining from $90 billion to approximately $75 billion in 2024. This was due in part to slowing luxury demand in China and some cannibalisation from lab-grown diamonds in the U.S. While the diamond market may go through its cycles, the emotional and lasting value of real diamonds will continue to endure.

I see this as an industry that’s in the business of bringing joy to consumers, through birthdays, engagements, anniversaries and gifting. Life is an assimilation of memories, time spent with loved ones and natural diamonds are attached to landmarks in life. It’s the only commodity that’s a brand in itself.

–  News Courtesy-TOI