Why Are Diamonds so Valuable?

diamonds-valuable Credit: Stephen Durham/CC-BY 2.0

The popularity and perceived value of diamonds come from what is likely the most successful advertising campaign in global history, which was waged by the DeBeers company. Diamonds are not a tradeable investment like gold and silver. Instead, they gained their status through psychological manipulation.

Through advertising and the help of Hollywood, diamonds have become a symbol of wealth and undying love. A cunning campaign of selling only a fraction of the diamonds pulled out of their South African mines helped DeBeers create the appearance of rarity, driving prices up. The truth is that diamonds aren't really rare at all. At the end of the 20th century, other companies found diamond reserves through the use of satellite technology, opening the market a bit. However, DeBeers, which holds a large warehouse of uncut diamonds, still controls 75 to 80 percent of the rough diamond market.