High-net-worth individuals and wealthy investors in South Korea are increasingly turning to high-end colored gemstones as alternative investment vehicles, shifting away from traditional safe-haven assets like gold and diamonds. While gold futures recently experienced a ten percent correction from earlier record highs due to a stronger dollar and the U.S. Federal Reserve's hawkish stance, diamond prices have also plunged sharply, with the International Diamond Exchange index dropping nearly forty-six percent from its 2022 peak due to the rising market share of lab-grown alternatives and weaker consumer demand in major markets like China. In contrast, natural colored gemstones are rapidly appreciating because their global supplies are becoming exceptionally scarce, a prime example being natural rubies, whose availability has been severely restricted due to the civil war in Myanmar—a country historically responsible for ninety percent of global production—alongside ethical concerns that prompted top luxury brands to halt sourcing. This unprecedented scarcity has led to exponential value surges within the industry, with jewelry experts noting that a ruby ring valued at seven billion won in 2021 recently traded for over thirty billion won despite featuring a smaller gemstone. The domestic market is strongly exhibiting the Veblen effect and fear of missing out dynamics, as consumer demand continuously climbs alongside aggressive price increases implemented by global luxury houses such as Bulgari, Cartier, Rolex, and Chaumet. Reflecting this trend, high-end jewelry sales at Shinsegae Department Store skyrocketed by fifty-five point six percent in the first quarter of the year, significantly outperforming the already robust twenty-nine point eight percent growth observed in the broader luxury goods sector. Beyond simple wealth accumulation, affluent Korean families are increasingly utilizing high jewelry as a specialized asset class for generational wealth transfers and inheritance tax planning, preferring it over real estate or fine art because precious gems require minimal storage, incur no maintenance costs, and can be easily transported across international borders as a hedge against currency devaluation and macroeconomic volatility. However, gemology experts from Hanyang University caution against entering the colored gemstone market for short-term speculative gains, noting that these high-value items lack the immediate liquidity of corporate stocks or gold bullion, meaning transactions remain highly dependent on specific buyer demand and should be approached with a long-term multi-generational holding strategy spanning several decades.   (ICE SEOUL)

Fonte notizia: KOREA JOONGANG DAILY