Is it better to invest in diamonds or gold?

In times of global economic uncertainties like this is the case today, many people turn to gold as the safest haven for their investment. However, there seems to be lot people who are also willing to try their luck on global market by investing in diamonds.

In India, for instance, investing in diamonds is becoming increasingly popular option among many investors because rising gold prices are too much for many people who choose to turn to diamonds instead.

In the last 12 months gold prices have increased by 30%, and not only that, gold is also the subject of many import taxes, which results in 30% even higher prices. With diamonds in India things are the opposite because many diamonds are being cut and polished in India which doesn't result in excessive prices.

Diamonds are not only excellent investment in India but for the rest of the globe too. This especially refers to better quality diamonds that are known to hold and even increase their value over time.

Just like gold, diamonds are global merchandise too. This means that they can be bought and sold in any country of the world.

I have already written that Bloomberg analysts estimate that the average price of rough diamonds will rise 9% to $145 a carat next year, 1.4% in 2013 and 4.8% in 2014. On the other hand several major market analysts believe that gold prices will start to decrease in 2013 so this might be an excellent time to invest in diamonds.

Add to this the economic rise of China and India and their growing hunger for luxury goods, and investing in diamonds certainly seems safer bet as compared to investing in gold.