Discover Why Colored Gemstones Are Becoming 2025’s Hottest Alternative to Traditional Precious Metals
As investors seek new ways to diversify their portfolios and hedge against economic uncertainty, colored gemstones are emerging as a compelling alternative investment option that can act as a hedge against inflation and have outperformed the S&P by substantial margins over the last three years. While traditional precious metals like gold and silver have long been the go-to safe haven assets, colored gemstones, particularly those of exceptional quality and rarity, have consistently outperformed other alternative assets, including gold, with some appreciating by over 100% within a decade.
The Rise of Colored Gemstones as Investment Assets
Recent turbulence in diamond pricing has caused investors to look towards colored gemstones, as natural diamond prices have declined by 18% to 23% over the last 12 months largely due to the proliferation of lab-grown diamonds. In stark contrast, investment grade colored gemstones are setting records at Sotheby’s and Christie’s auctions, with a ruby recently selling for $34.8 million, the highest ever for a ruby at auction.
The appeal of colored gemstones lies in several key factors. The world’s prominent mines are seeing rapid depletion of their output, from Burma for rubies to Colombia for emeralds and Kashmir for sapphires, with supply expected to reduce further without the discovery of new mines. Additionally, increased global consumption has shifted from a unipolar US-led market to a multipolar one, with major purchases now coming from China and India, where colored gemstones represent nearly 20% of the Chinese fine jewelry market.
Top Gemstone Investment Opportunities for 2025
According to gemstone investment experts, the top three investment gemstones are ruby, sapphire and emerald, with prices expected to increase by an average of 5-8% per year. However, other colored stones are showing even more impressive returns:
- Paraíba Tourmaline: The rarest and most expensive copper-bearing variety has been growing for 30 years, with notable price increases of 31% in 2018
- Spinel: Especially Mahenge spinel is becoming more mainstream with prices rising, and Tanzanian cobalt blue spinel has increased from under $1,000 per carat to much higher valuations
- Tanzanite: As a single-location gemstone found only at the foot of Mount Kilimanjaro, it’s assumed the mine will be exhausted in the not-too-distant future
Why Choose Colored Gemstones Over Traditional Precious Metals?
Colored gemstones like emeralds, rubies, and sapphires are inherently rare compared to diamonds, with their limited supply enhancing their value over time. Unlike precious metals that are mined in large quantities annually, the supply of high-quality colored gemstones is exceedingly limited.
Gemstones offer unique advantages as tangible assets that you can physically possess and enjoy, regardless of their investment potential, and can act as a hedge against inflation as the cost of living rises. As a long-term investment, gemstones do not fluctuate as much as stocks or bonds.
Investment Considerations and Best Practices
For those considering gemstone investments, almost all gemstones are suitable only as untreated, natural-colored cut stones, with colored gemstones being interesting as an investment from a weight of one carat and requiring internationally recognized certificates from gemological institutes. As a rule of thumb, 10 to 20% of liquid assets should be invested in gemstones, with a long investment horizon of five or more years.
Unlike gold, whose market is standardized and transparent, the gemstone market is fragmented and heavily reliant on expertise, requiring investors to source from reputable dealers and focus on quality over quantity. This is where working with experienced professionals becomes crucial.
Finding Expert Guidance on Long Island
For Long Island residents interested in exploring colored gemstone investments, Gold Coast Jewelry & Pawn is one of the largest providers of estate jewelry on Long Island, carrying an expansive collection of unique vintage pieces with constantly refreshed inventory, where all estate jewelry is fully appraised, inspected, repaired, and cleaned. Located in their Huntington showroom, they offer a vast collection that includes every style, design, and gemstone imaginable, including diamonds, rubies, emeralds, sapphires, amethysts, topaz, and garnets.
Whether you’re looking to buy investment-grade colored gemstones or sell existing pieces, this Jewelry Store Long Island provides the expertise and authentic inventory needed for serious gemstone investments. With a reputation for skill, honesty and integrity, customers consistently report satisfaction with both service and value.
The Future of Alternative Investments
Since 1995, market prices for naturally colored, untreated gemstones have at least tripled, demonstrating their long-term appreciation potential. As traditional investment vehicles face increasing volatility and precious metals experience market pressures, colored gemstones represent a unique opportunity to diversify portfolios with beautiful, tangible assets that have both aesthetic and investment value.
The convergence of declining supply, increasing global demand, and shifting investor preferences away from traditional alternatives makes 2025 an opportune time to consider colored gemstones as a serious addition to any investment strategy. With proper research, expert guidance, and a focus on quality certified stones, investors can potentially benefit from this emerging asset class while owning some of nature’s most beautiful creations.