Gold or Diamonds? Which Is More Valuable?
Let us imagine a dream scenario for a moment. You approached by a prospector who had uncovered a hoard of gold and diamonds. He wants to disperse it to passersby, and you just happen to be in the right place at the right time. He points to the pile of diamonds and to the pile of golds and tells you that you can take as much as you can physically carry with your own two hands.
Which pile would you dive towards first? Neither answer is wrong, as you're sure to make a profit here either way. Presumably you'd like to make the most profit possible, so which is the pile that would fulfill that desire? This is an interesting thought experiment that will allow us to discuss a wide range of topics related to gold and diamonds. So let's discuss, gold or diamonds? Which is more valuable?
Why Are Gold and Diamonds Valuable?
Both gold and diamonds are valuable largely because they are exceedingly difficult to mine. They also each require skilled tradesmen in order to hone and create gorgeous jewelry and trinkets. We won't go into which one is more difficult to work with simply because they both have their own unique set of challenges. These materials aren't simply nice to look at, they are also have a ton of uses in industry and manufacturing.
How Much Can You Carry?
The first true variable that we need to establish is how much the individual we're talking about can carry. Now I'm sure you're a strapping person that could carry plenty more weight than the number that we'll arbitrarily pick. I'm gonna go with 100 pounds, because it's a nice round number that someone with my limited mathematical ability can work with relatively easily. At least that's what I assume. We'll see how well it goes once we actually get into the meat of the calculations.
What Are Diamonds Worth?
If you buy diamonds on the retail market the costs can vary widely. A one carat diamond can cost between $2000 and $25000 per carat depending on the quality. Again we'll pick a number that's easy to work with and say the average cost per carat is $5000. Now, a carat is equal to 0.2 grams. So a 5 carat or 1 gram diamond would be $25000. That's a nice chunk of change. Extrapolate that to 100 pounds? We're looking at 50,000 grams. $25000 dollars multiplied by 50000 grams? You're looking at $12,500,000,000. That is twelve and a half billion dollars. Not a bad haul!
What Is Gold Worth?
Gold is heavier than diamonds but since we're working solely off of the weight the equation becomes a relatively simple one. What is gold's price per gram? Well, it fluctuates but we'll round it to $55 per gram. Much less than the price for a gram of diamond so you can probably see where this equation is going. If we multiply that by the same 50,000 to get up to that 100 pounds you're cashing out a meager $2,750,000. Almost three million is significantly less than the twelve and a half billion that you'd get if selling all of your diamonds at retail price...
So why would anyone pick the gold over the diamonds, right? Well, here comes the rub...
Why Does Gold Win Out?
Gold is considered a far better investment than diamonds. In fact, most pawn shops won't even consider buying diamonds. Check out our blog on "Why Pawnshops Don't Buy Diamonds?" for more information on that. The truth is that goal is much more rare than diamonds on a global scale. One is a specific rare element, the other is a specific formation of the most common element on the planet. If you think you'll walk away with diamonds and get anywhere near twelve trillion for a chain of carbon you're sadly mistaken.
Gold has an intrinsic trade value. You can buy and sell gold on the stock market. The same can't be said about diamonds. Up until the seventies the exchange rate of a country's currency was based solely on how large their gold reserves were. When we were taken off the gold standard that changed slightly, (whether that was a net negative or positive is an article for another website) but gold remained an extremely valuable resource that is still very easy to buy or sell if you're looking to do either.
No matter whether you are a bigger fan of precious gems or precious metals, it is equally important to care for them to the best of your ability. What is my solution for the deep clean that keeps jewelry shining like new? The Ultrasonic Jewelry Cleaning Kit is perfect for that purpose. It offers the deepest clean of any other product that I've tried. It even works on watches, sunglasses, or anything else that need a bit of micro-scrubbing applied to it. Pure gold is one of the least reactive chemical elements so you'll never need to worry about tarnishing, but if you ever meet a miner that offers you a pile of silver you'd do well to stick it inside our anti-tarnish cloth storage bags to keep it looking pristine.
My spouse assumed that diamonds would be the right choice, and on paper it's almost the correct choice. The problem is that secondhand diamonds are practically worthless, while gold never loses value no matter how many times it changes hands. If you can find a jeweler willing to buy the massive number of theoretical diamonds you might be able to come out with roughly the same amount as the person who chose to take the imaginary gold, but you're going to have a much harder time selling those diamonds in the first place.