Here at the New Statesman we work surrounded by diamonds. Not literally in the office – journalism isn’t that well remunerated – but because our office is on Hatton Garden, a London street synonymous with the jewellery trade. It is one of London’s more interesting streets for people-watching, partly because of the people – elderly jewellers with briefcases, jumpy young men with crossbody bags full of cash, hat-wearing Hasidic Jews – and partly because there’s a hint of crime in the air.
For decades, gold, silver and diamonds, stolen or bought in suspicious circumstances, have made their way to Hatton Garden to be smelted. When the Italian jewel thief Renato Rinino stole a diamond brooch and cufflinks from the rooms of the then Prince Charles at St James’s Palace in 1994, they were with a Hatton Garden dealer the same day. It was here that the Rascal Gang stole £7m from the Graff diamond workshop in 1993, and in April 2015 a gang of pensioners drilled into the basement of Hatton Garden Safe Deposit Ltd to conduct what’s thought to have been the largest burglary in British history.
As a journalist writing about money, it’s exciting to pop out for lunch and observe the occasional transaction that looks (without wishing to impugn the many legitimate businesses here) as if it might involve a bit of VAT fraud, or money laundering, or perhaps both. But there’s also a more general, perfectly legal kind of rip-off going on here. The diamond industry is itself based on bilking young lovers into making what is, on a financial level, one of the worst investments possible.
There is no central commodities market for diamonds, as there is for gold and silver, and because they’re not homogeneous, there is no open consensus on what they’re worth. As a rule of thumb, I’d say it’s a small fraction of what you will pay a high-street jeweller. Look at the second-hand prices of diamond rings from well-known brands on a website like eBay, and you will see that even carefully provenanced and accredited gems sell for around a tenth of the price of their new retail value. Nothing, not even a brand-new car or a designer dress, depreciates as quickly as a diamond.
Even the prices paid by “sightholders” – the dealers who buy stones from the mining companies – are effectively synthetic, because diamonds aren’t rare. There are beaches on Namibia’s western coast where they have been deposited for millions of years by the Orange River, and where you might pick them from the sand or dig them up from the gravel beneath. Although you might also not do that, because the whole 200-mile stretch of coastline – the Sperrgebiet (forbidden region) – is closed to visitors and controlled by a partnership between the Namibian government and De Beers.
De Beers is the company behind the slogan “A diamond is forever” and the idea that a suitor should spend two months of their salary (two months!) on an engagement ring. The high prices diamonds have commanded for many years have been dictated by the number of stones De Beers decided to release (which in the 1980s accounted for 90 per cent of production). But it no longer controls the market, which is turning away from natural stones as young consumers buy lab-grown diamonds (indistinguishable to the untrained eye, and the artificial rocks are less damaging to the environment) or going second hand. Prices of rough diamonds have almost halved in the last two years. De Beers’ majority owner, the mining group Anglo American, wrote down the value of its 85 per cent stake in the company by $1.6bn last year and plans to sell it off. Even for the industry, a diamond’s value is not forever.
That’s not to say that you shouldn’t buy one, if you genuinely want one – but don’t mistake the cost of the stone for any kind of permanent financial value. And ignore the jewellery industry’s rather vampiric attempts to monetise your happiness; an engagement ring is just a bauble attached to something far more important and rewarding. No investment pays dividends like the decision to give yourself to the right person.
[See also: Britain is trapped in the Long Seventies]
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This article appears in the 12 Feb 2025 issue of the New Statesman, The Reformation