For centuries, rubies have been revered as the "king of gemstones", their deep crimson hues symbolizing passion, wealth, and power. But today, they are more than just a luxury accessory—they are emerging as a scarcity-driven asset class.
Recent market trends show a sharp increase in ruby prices, with per-carat values reaching record highs. In June, mining giant Gemfields achieved its highest-ever per-carat price at a rough auction—$317 per carat—marking an almost 10% increase from the previous auction just six months prior.
For investors, the parallels to other alternative asset classes are striking. Much like fine art, rare wines, and vintage watches, rubies benefit from limited supply, global demand, and an intrinsic aesthetic appeal. But with rubies, the key differentiator is rarity—especially for top-tier stones over 3 carats, which are becoming nearly impossible to source.
Extreme Supply Constraints
Unlike diamonds, which have a steady global production, rubies are found only in sporadic deposits. The world's historic ruby mines in Thailand, Cambodia, Kenya, and Myanmar have either dried up or become inaccessible due to political instability. Today, Mozambique remains the last major producer, but even there, mining yields are unpredictable.
Rising Auction Prices & Wealth Migration into Hard Assets
Much like how high-net-worth investors are diversifying into art, collectible cars, and rare timepieces, rubies are seeing strong institutional demand. At Sotheby’s, the 55.22-carat Estrela de Fura ruby from Mozambique set new valuation records, signaling a broader shift toward gemstones as an investable asset class.
Luxury Brands & Market Sentiment
Prestige jewelers are increasingly incorporating investment-grade rubies into their collections, further tightening supply. Meanwhile, diamond traders, facing declining diamond prices, are shifting their focus toward colored gemstones—driving additional price momentum.
Superiority in Rarity
Some gem experts now argue that large, top-quality rubies are significantly rarer than diamonds. One dealer put it simply:
"If you sell an 8-carat ruby today, try finding another one just as good—it’s much harder than replacing a diamond of the same size."
For those exploring alternative investments beyond stocks and real estate, rubies present an opportunity to own an appreciating, tangible asset:
> Proven Long-Term Value – Prices have surged 30-50% year-over-year, with premium stones seeing even higher appreciation.
> Scarcity-Driven Price Growth – Unlike mass-produced luxury goods, top-tier rubies are a finite resource, making replacement costs skyrocket.
> Portfolio Diversification & Wealth Preservation – Like art, gold, and rare watches, rubies offer protection against inflation and economic uncertainty.
The investment case for rubies is clear: demand is growing, supply is shrinking, and prices are climbing. As one miner aptly noted:
"When a ruby exceeds 5 carats and is perfect, it is sold for whatever price is asked."
That statement, first made in the 17th century, holds even more weight in today’s ultra-competitive luxury market.
This article is inspired by insights from the October-November 2024 issue of Rapaport Magazine. Read the full original piece here:
https://rapaport.com/magazine-article/rubies-are-red-hot-right-now-and-expensive/
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