DiamondBuzz
Wealthy Russians Surge in Investment-Grade Diamond Purchases Amid Market Uncertainty
Demand for polished diamonds up by 60% as individuals diversify portfolios with gemstones following VAT abolition and growing financial volatility.
Wealthy Russians are increasingly turning to investment-grade diamonds, with purchases of polished stones rising by 60% last year, according to VTB, the country’s second-largest bank. This surge in demand is attributed to the government’s decision to abolish VAT on diamond purchases, which has made gemstones a more attractive investment option.
Oksana Semenenko, vice president at VTB and head of its private banking division, explained that the rarity and uniqueness of diamonds make them especially appealing during times of rising financial market instability and tighter investment restrictions. Many affluent clients are now incorporating alternative investments, including diamonds, into their portfolios, typically allocating 5-10% of their assets to these tangible assets for diversification.
This shift comes amid increasing sanctions from the G7 and restrictions on Russian currency, which have impacted Russian diamond exports. In response, Alrosa, the state-run diamond mining giant, is turning to alternative markets to sell its goods. The company’s Diamond Exclusive program focuses on polishing its largest and highest-quality diamonds, particularly stones of 3 carats or more, to be sold directly to investors through partnerships with VTB and other financial institutions.
DiamondBuzz
Global Diamond Markets and Overall Prices Remain Steady
Steady Prices Mask A Polarizing Market Where Specific Large Shapes Win and Poorly Cut Diamonds Stagnate.
The natural diamond and high-end jewelry sectors are experiencing a period of selective resilience. While macro-market prices remain steady, structural shifts in consumer preference, inventory drawdowns, and geographic demand variations are creating distinct “winners and losers” across diamond cuts, sizes, and geographies.
- Macro Overview: Global markets and overall prices remain steady. Dossier prices continue to recover—particularly in the 0.30 ct. round collection goods—following a significant inventory drop.
- B2B Buyer Behavior: Demand remains patchy. Wholesale buyers are strictly purchasing to fulfill specific, pre-existing orders rather than buying for inventory.
- Category Winners: Sales are heavily concentrated in 2-carat and larger diamonds. While rounds are stable, long fancy shapes (Ovals, Marquises, Emeralds) are outperforming rounds in the 2 ct.+ category. High-quality Marquises, long Radiants, and long Cushions are in short supply.
- Shape Premiums & Trends: > * Marquise is currently the most expensive fancy shape.
- Long Cushions are highly liquid, trading at a 20% to 25% premium over square cushions.
- Antique cuts/styles and well-proportioned, elongated Ovals (D–I color, VS–SI clarity) see robust demand, especially in the US.
- Illiquidity Risk: Poorly proportioned fancy shapes remain entirely illiquid.
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