Gold falls 6% as gemstones return to investors' agenda

According to Bloomberg's analysis, despite the drop in gold prices, structural factors such as inflation and budget deficits are driving investors toward gemstones like emeralds, rubies, and sapphires.

Scraper SystemJuly 04, 2026, 10:43 PM

Gold falls 6% as gemstones return to investors' agenda

Although gold is traditionally seen as one of the most important safe havens against inflation, war, and political uncertainty, it has lost 6% since the start of the year. According to Bloomberg, the decline was driven by easing fears of war between the US and Iran and expectations of tighter monetary policy following Kevin Warsh becoming Federal Reserve (Fed) Chair.

However, the analysis emphasizes that investor interest in physical assets has not ended. The US budget deficit, running at around 7% of GDP since 2022, and public debt approaching $40 trillion suggest that inflationary pressures could remain elevated for a long time.

Inflation expectations and gemstones

Analysts cited by Bloomberg predict that inflation will remain in the 3.5% to 4% range even if central banks maintain tight monetary policies. They warn that a new inflation shock could strongly boost demand for value-preserving assets once again.

In this environment, attention is turning to gemstones as an alternative asset class. According to the report, during the global inflation wave of the 1970s, stones such as rubies, emeralds, and sapphires delivered extraordinary gains, while the price of some investment-grade diamonds multiplied several times.

Competition from lab-grown diamonds

However, the current market has different dynamics from the 1970s boom. The growing competition from lab-grown diamonds is reducing the investment appeal of natural diamonds. In contrast, stones such as emerald, zircon, tanzanite, peridot, and morganite are said to have a higher potential to preserve their value over the long term.

Meanwhile, the global investment wave in artificial intelligence and energy infrastructure is putting pressure on the prices of many commodities, from copper and uranium to rare earth elements. This reinforces the overall environment that supports physical assets.

Historical warning

Bloomberg also warns that investing in gemstones is tightly linked to macroeconomic cycles. Recalling that diamond prices fell more than 70% in the early 1980s as inflation subsided, it stresses that the performance of these assets depends entirely on price levels and global monetary policies.

In conclusion, the recent drop in gold does not mean the appeal of physical assets has ended; it merely reflects a temporary shift in market sentiment. As long as the structural factors fueling inflation, budget deficits, and rising investment spending persist, gemstones and precious metals will remain an option for investors seeking to diversify and protect their portfolios.

Gold falls 6% as gemstones return to investors' agenda