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article imageAre diamonds the new gold?

Gold has always been the ultimate investment and a currency used by civilizations for more than 6,000 years. However, as the value of the shiny metal plunges 30 percent, it is becoming increasingly apparent that gold may soon be losing its luster. Investors are now turning toward another precious commodity: the diamond.
According to Mark Mobius, a well-known emerging markets investor, diamonds are on the cusp of a boom and should soon be available to investors via funds. In fact, a group of hedge fund traders have already launched a Los Angeles, California-based investment Diamond Exchange, allowing investors to buy physical diamonds.
Similarly, Gemshares, a Chicago, Illinois-based company has also announced a partnership with the Nasdaq OMX Group (NDAQ) and is in the process of developing the GemShares Global Investment Grade Standard Diamond Basket Index. This union will lead to the creation of an exchange traded fund (ETF) backed by real diamonds.
With more attention being diverted towards diamonds, several companies are now producing (or growing) diamonds via a process called Microwave Plasma Chemical Vapor Deposition. Carbon atoms are layered on top of a diamond seed initiating a process similar to the natural one.
The only difference is that this man-made process produces diamonds much faster than those obtained through the natural process. Lab-created diamonds are grown in controlled laboratory environments. Advanced technological processes duplicate the conditions under which diamonds naturally develop. The final product – once it’s cut and polished – looks identical to the one that is obtained through mining.
Man-made diamonds were first developed during the 1950s by research scientists at General Electric (GE). Initially, they developed near-gemstone quality synthetic diamonds primarily for industrial purposes. Three decades later, in 1982, a 1.2 carat single crystal diamond was synthesized by Sumitomo Electric. The diamond turned out to be one of the largest man-made stones in the world. Since then, synthetic diamonds have been designed, developed and created.
Lynette Gould, spokesperson for De Beers, believes that synthetic diamonds have “very exciting potential,” especially in industrial applications.
While diamonds are known for their beauty and their use in jewellery, this metal has many other qualities. It is the hardest substance known to man with the highest thermal conductivity, which means a high level of heat can pass through it without causing any damage.
If there was a huge supply of diamonds, it could be used quite effectively by manufacturers. The fact that now diamonds can actually be created opens up an entirely new avenue for their use and application.
The story of man-made diamonds and how they have the capacity to influence many industries was reported by 21st Century Television, a television show on the forefront of exploring state-of-the-art technology and innovative business strategies.
According to the 21st Century Television’s news report, man-made diamonds open up incredible possibilities. Natural diamonds may be one of the most sought-after gems in the world but they are also extremely expensive. Man-made diamonds may very well open up a new chapter in the history of diamonds.
These lab-made precious stones are not only good for the environment but the industrial uses for diamond are almost without limits. While there is no doubt that there will always be consumers who will never accept lab-grown diamonds (approximately 15 percent, according to this report), there is still the other 85 percent that is open to the idea.
Concerns have been raised that man-made diamonds will not command the same premium, prestige and recognition as natural diamonds.
According to Ya’akov Almor, a representative of the International Diamond Council, this is not the case and man-made diamonds can enjoy the same recognition, depending on the market segment. It is believed that these diamonds can play a critical role in industrial application such as mining, electronics and construction.
"Synthetics have a place in the market and it's a completely legitimate market. There is a need for flawless, clean, synthetic diamonds especially for the semi-conductor industry,” Almor said.
Demand for man-made diamonds is growing at an exponential rate in China. In addition, the United States has also been showing a rapid increase in diamond demand.
Approximately $23 billion worth of polished diamonds were imported by the U.S. last year, an increase of nearly 16 percent from 2012. The average price of diamonds has also increased by 14 percent to $1,855 per carat.
With the entry of man-made diamonds, it is evident that the global diamond industry is getting ready for a transformation. Diamond prices are highly volatile and there is no doubt that consumers are looking for alternate options. Thus, while there will always be skeptics, at the same time, there will be consumers who will show interest in these diamonds.
More about Diamonds, Investing, Gold, 21st Century Television
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