The quest for safe and profitable investment avenues is an ongoing journey for many individuals and businesses. Traditionally, we have been attracted to stocks, real estate, and precious metals. Yet, these sectors are becoming increasingly saturated and unpredictable due to the shifting global economy. In recent years, astute investors have been broadening their horizons and turning to alternative investments. Among these, one fascinating, colourful, and often overlooked option shines – the opal.
Opals, with their entrancing play of colour and unique characteristics, have been cherished throughout history. They captivate not only with their aesthetic charm but also with their promising return on investment. Yet, why are these dazzling gems frequently bypassed in favour of more conventional investments like gold or diamonds?
This blog will dive into the world of opals as investment assets, and why these intriguing precious stones deserve your attention. We will take a tour from the fiery depths of the Australian opal mines, the global hub of opal production, to the opulent jewelry stores of New York, Paris, and Hong Kong. We will explore the factors that make opals a great investment, such as their rarity, their increasing demand in both traditional and modern markets, and their undeniable beauty that makes them desirable to many.
So, whether you’re a seasoned investor seeking a novel opportunity, a jewellery aficionado with an eye for unique treasures, or someone simply intrigued by the world of gemstones, this journey into the realm of opals is sure to sparkle with valuable insights and colourful discoveries.
Reasons Why Opals Are A Great Investment
Opals Are Rarer Than Diamonds
Opals, though less known than diamonds, are rapidly becoming a coveted gem in the investment world due to their rarity and unique aesthetic appeal. The scarcity of any commodity, be it gold, diamonds, or opals, increases its value – this is a fundamental economic principle.
Now, let’s delve into how opals have gained their reputability as a worthy investment, especially in comparison to diamonds.
Unique Formation Process: Opals are formed from a specific series of geological conditions. Rainwater seeps into the rock and, over time, dries out, leaving behind tiny spheres of silica that refract light to produce the mesmerizing colors we associate with opals. This unique, delicate, and lengthy process contributes to the rarity of these gems.
Limited Sources: Unlike diamonds that can be found in many regions worldwide, the majority of the world’s opals come from Australia – about 95%. The remaining 5% are sourced from Mexico and Ethiopia. Therefore, the geographic concentration adds to the scarcity of opals.
Finite Supply: Diamonds can be created synthetically in labs, which is a more controlled and predictable process. However, opals cannot be made in the same way. Synthetic opals do exist, but they are easily distinguishable from natural opals and are far less valuable. Consequently, the finite supply of naturally occurring opals contributes significantly to their value and investment potential.
Increasing Demand: With their increasing popularity in jewelry, demand for opals is on the rise. As a result, prices have been rising, and the value of high-quality opals has skyrocketed, yielding a substantial return on investment for those who bought opals in the early stages of this trend.
Uniqueness: Every opal is unique, meaning no two stones are exactly the same. Each gem has a distinct color, pattern, and size, which adds to its desirability and rarity.
In conclusion, the rarity of opals, coupled with their beauty and growing demand, makes them an attractive alternative investment. As diamonds become more common and less exclusive due to lab production, the truly rare gemstones like opals are increasingly viewed as valuable and profitable additions to investment portfolios.
Rare Opals Are Valuable
Rare opals are not only beautiful to behold but also carry substantial monetary value, making them an appealing option for investors. Several factors contribute to the valuation of these gemstones and their potential as a profitable investment.
Rarity and Uniqueness: Every opal is a one-of-a-kind piece of nature’s art. Each stone possesses a unique combination of color, pattern, and brightness that cannot be duplicated. This uniqueness, along with the limited supply of opals, can drive up their value significantly. Particularly rare or high-quality opals can command prices per carat that rival or even exceed those of diamonds.
Demand and Supply Dynamics: The value of any commodity is heavily influenced by the interplay of demand and supply. With growing interest in opals, especially from emerging markets like China and India, demand for these gems is on the rise. On the other hand, opal production is concentrated in a few geographic locations and can be unpredictable due to the natural processes involved. This demand-supply mismatch can drive up the price of opals.
Quality and Type of Opal: All opals are not created equal. Some types of opal, such as the Black Opal or the Boulder Opal, are particularly prized for their vibrant colors and unique patterns. The quality of an opal is also determined by factors like color range, pattern uniformity, and the brightness of color play. High-quality opals of these types can fetch substantial prices in the market.
Investment Diversification: As investors look to diversify their portfolios beyond traditional assets like stocks and bonds, rare and precious items like opals are becoming increasingly attractive. They can provide a hedge against market volatility and potentially offer high returns, making them a valuable addition to a well-rounded investment portfolio.
Long-term Appreciation: Historically, the value of opals has appreciated over time. While market fluctuations are inevitable, the long-term trend for opal prices has been upward. This makes them a potential source of long-term investment return.
Investing in opals, like any investment, does require careful consideration and research. However, with their increasing scarcity and growing demand, along with their undeniable beauty, opals can be a gem of an opportunity for those looking to diversify their investment portfolios and potentially achieve significant returns.
Black Opals Have Steadily Increased In The Past 50 years
Black opals are among the rarest and most valuable gemstones on earth. With their mesmerizing blend of radiant colors, they captivate viewers like few other gemstones can. However, it’s not just their stunning beauty that makes them an excellent investment. Over the past 50 years, the value of black opals has seen a significant and steady increase, making them a sought-after asset for both gem enthusiasts and savvy investors.
Several factors have contributed to this consistent increase in value:
Scarcity and Rarity: Black opals are primarily found in the Lightning Ridge area of New South Wales, Australia. This concentrated geographic occurrence makes them incredibly rare. Furthermore, quality mining deposits are becoming increasingly scarce. As it becomes harder to mine high-quality black opals, their value inevitably goes up due to the classic economic law of supply and demand.
Growing Demand: The past few decades have seen a surge in the popularity of black opals, primarily driven by rising wealth in emerging markets. Countries like China and India have shown an increased appetite for unique and high-quality gemstones, including black opals. As the middle and upper classes continue to expand in these markets, this demand is expected to grow, pushing prices even higher.
Inflation and Currency Devaluation: Like other tangible assets such as gold, black opals can act as a store of value in times of inflation and currency devaluation. Over the past 50 years, as the buying power of money has generally decreased, the value of assets like black opals, which cannot be easily replicated or produced in mass quantities, has gone up.
Investment Diversification: Investors increasingly view black opals as a way to diversify their portfolios. Unlike stocks and bonds, the value of black opals doesn’t directly correlate with the financial markets, making them a good hedge against stock market volatility.
Appreciation of Luxury Goods: Luxury goods, including high-quality gemstones, have appreciated in value over the past 50 years. As wealth increases worldwide, so does the demand for items that denote status and opulence. Black opals, with their stunning visual appeal and rarity, fall into this category.
In summary, the steady increase in value of black opals over the past 50 years is a product of their inherent rarity, growing demand, and the rising wealth and desire for luxury goods worldwide. These factors make black opals a potentially lucrative and increasingly popular investment choice. However, as with any investment, it’s crucial to do thorough research and consider seeking advice from experts in the field.
Tangible Asset
Opals, like other precious gemstones, are considered tangible assets. A tangible asset is a physical item of value that an individual or corporation owns. These assets can range from real estate and machinery to precious metals and gemstones. Here’s how opals fit into this category:
Physical Existence: Opals have a physical presence. They can be seen, touched, and possessed, unlike intangible assets like stocks, bonds, or intellectual property. This physical existence is one of the key features that define a tangible asset.
Inherent Value: Opals carry an intrinsic value derived from their unique properties like color play, size, origin, and overall quality. They are not just symbols of value like paper currency, but have inherent value themselves.
Durability: Opals are relatively durable, lasting for years, even centuries if taken care of properly. This durability allows them to retain value over time, unlike some tangible assets that can depreciate due to wear and tear.
Resilience to Financial Market Fluctuations: The value of opals, like other tangible assets, doesn’t directly correlate with financial markets. This means that while the value of stocks and bonds may fluctuate with market conditions, opals can maintain or even increase their value independently, making them a good option for diversifying an investment portfolio.
Tradeability: Opals can be bought, sold, and traded globally. This tradeability makes them a liquid asset, which adds to their appeal as an investment.
Store of Value: Just like gold or real estate, opals can act as a store of value. They can help protect against inflation or economic downturns because their worth is not tied to a specific currency.
Investing in opals as tangible assets offers several advantages. They add diversity to your investment portfolio, can provide a hedge against inflation and financial market volatility, and can appreciate in value over time due to their rarity and increasing demand. As always, investing in tangible assets like opals should be done with careful research and, if possible, expert advice.
Only So Many Available In The World
Opals are a product of unique geological processes that occur over a long period of time. These processes involve the deposition of silica-rich solution into cracks and voids in the earth, which, over millions of years, harden into opal. The right conditions for this process to occur naturally are rare and only occur in a few places worldwide, primarily in Australia, which is responsible for 95% of the world’s opal production. Other countries like Ethiopia and Mexico also produce opals but in much smaller quantities.
Another significant factor is the depletion of known opal deposits. Mining opals is a challenging endeavor, and miners often have to dig deep into the earth to reach the layers where opals form. Over time, these resources get exhausted, and unless new deposits are discovered, the supply of opals is finite.
In contrast to some other gemstones like diamonds, there is no viable method for synthesizing opals that can truly match the quality and beauty of natural opals. Lab-created opals do exist but are easily distinguishable from their natural counterparts, and they command far less value in the market.
Furthermore, opals are formed over millions of years, so even though new opals are technically still being formed, the rate at which they are created is incredibly slow and does not significantly contribute to the overall supply.
All these factors contribute to a finite and steadily diminishing supply of opals. As with any commodity, as supply decreases and demand increases, the value of opals is likely to rise, making them an intriguing prospect for investment.
