In diamonds, fakes are also forever

“These days people are too fond of fashion jewellery instead of gold, I hear,” a proud mother remarked while asking her daughter whether she was regularly wearing the ornaments she got in her wedding a few years ago.

The mother was shocked when the daughter said, “Mine has been mostly lying in the bank locker. I wore one of them at a marriage some time back.”

The mother asked, “Which one did you wear, the diamonds which we gifted during your wedding?”

“Yeah, at least they are fashionable. But tell me how much had you paid for them? Rs 25,000 or something,” the daughter asked.
But the mother got angry. “You kids don’t know how to value anything. You need to add another digit to that number,” she snapped.

This time it was the daughter’s chance to be startled. “What! You paid lakhs for those! At the wedding people couldn’t distinguish between the real diamonds that I wore and what the aunt who came down from US wore. She bought those fake diamonds after landing here. I went with her to shop and don’t think they cost more than Rs 3,300. She got as many compliments as I got.”

“Yes, but you don’t understand that there is no resale value for that Rs 3,300 that she spent. I bought that other diamond pendant for Rs 25,000 to wear at your cousin’s marriage few years before yours. I just revalued it. The jeweller told me he will pay Rs 25,000. So at least my money is coming back to me,” the mother said.

“Ma, but he is paying you for the rise in the gold that is holding the diamond in the pendant. It was at Rs 4,000 per 10 gram when you bought the pendant, while today it is at Rs 18,000 plus. Which means the resale price of the diamonds hasn’t gone up much.”

Mother was silenced by the argument. “My jeweller told me that small diamonds have no resale value. And we can’t afford the ones with high carats. So what’s the point of buying real diamonds when the similar looking artificial variants can be owned in few thousands,” the daughter went on.

This is not a debate in just this family alone. Many face a dilemma whether to go for fake or real diamonds.

Author Geoferry Miller in his book on consumer psychology titled Spent writes, Note that for many luxury status symbols, much cheaper fake versions exist. Real diamonds have 1,100 times the cost density of high quality fake diamonds (cubic zirconia, CZ). Arguably, the diamond buyer is overpaying the De Beers cartel by a factor of a thousand compared with the CZ buyer, for an almost indistinguishable stone.”

There is a rationale behind not spending the amount on real diamonds. “Casual observers can’t tell them apart, nor can most pawnshop owners using the standard thermal conductivity tests for distinguishing CZ from diamond. Only experts may notice the subtle double refractions caused by Moissanite’s hexagonal crystal structure,” Miller states in the book.

But this is a valid point, especially when gold prices are shooting through the roof and affordability of jewellery is pinching all buyers. Even traditional buyers are realising this and are not shying away from fake diamonds.

While window shopping at these stores that offer variants of fake diamonds a Gujarati shop owner shared, “Recently, a Rajasthani family was planning to buy a ‘vilandi’ (jadau) jewellery set for their soon-to-be daughter-in-law. Usually these jadau necklaces paired with earrings and a ring cost Rs 25-36 lakh.

But one of their relatives told them about the same pieces being now manufactured in artificial diamonds on silver instead of gold. The price of these pieces, known to be worn by only queens, comes down drastically. “The family visited us and was not convinced of giving artificial diamonds to their would-be daughter-in-law,” the shop owner said.

“But later the family bought the artificial uncut diamonds (polki) studded in silver with minakari work for Rs 25,000 from us and bought 1 kg gold biscuit to make up for the difference in their budget.”

Even the author Miller has tried it, “CZ (cubic zirconia) makes an excellent imitation diamond; I’ve made a necklace for my daughter from a perfect, three-carat, brilliant-cut CZ bought for $4 from a local gen and mineral shop.”

Not that one buys jewellery for investment alone. Now there are better options of investing in the raw material that goes into making a necklace - gold, silver and diamonds. For investing in metals such as gold, one can either buy silver and gold coins and bars that attract lower making charges than for jewellery pieces.

The making charges range around Rs 75-600 per gram depending on the intricacy of the design and the form.

Also, there are exchange traded funds (ETFs) that allow you to buy gold in demat form from the stock exchange and hold them in units. Thus one can even avoid the risk of the gold being not as pure as claimed, being lost or incurring extra money on bank lockers.

When it comes to diamonds there are various variants that artificial diamonds and other precious stones can be made of.
As Miller states, “The arms race between real and fake has also undercut the De Beers diamond cartel for more than a century, as ever-better imitation diamonds have been developed: titanium diaoxide (synthetic rutile) in the 1940s, yttriwm aluminium garnet (YAG) in the 1960s, cubic zirconia (CZ) in the 1980s and silicon carbide (Moissanite) in the 1990s.”

So, go buy your diamonds, without cursing yourself on spending a big portion of your husband’s salary. Don’t worry, if you carry them well, may be even the jeweller’s wife sitting on the next seat might not be able to say whether they are fake or real.