Wednesday, September 19, 2012
Will gold go even higher as the diamond market goes down given this huge discovery? Is the market readable anymore?
Call it the Soviet Union's most valuable cold war secret. This past weekend, Russia declassified the existence of what could very well be the richest diamond field in existence, located in the depths of a 62-mile diameter asteroid crater known as Popigai Astroblem in Siberia.
The diamonds found in the Popigai Astroblem are known as "impact diamonds." They're created when a meteor strikes a graphite deposit, as happened there an estimated 35 million years ago. Impact diamonds are significantly harder than normal diamonds, and are best suited for industrial or scientific use.
Given that diamonds can sell for $2,000 per karat with unusually large diamonds going for as much as $20 million, a discovery of "trillions of karats" could value this hole in the quadrillions of dollars. Of course, a diamond discovery of this magnitude is almost sure to have a serious downward impact in the per-karat price should full-scale mining operations ever begin.