Buying Black Opals for Investment

If you look at the increase in value of opals over the last 50 years, opals are a great investment that sees your asset steadily increase over time. Do not expect to make huge gains overnight when investing in opals like you would with some crypto-currencies like dogecoin or shiba-inu. When investing in opals, you should be looking at a long term goal; they require a lot of patience if you are purchasing with the idea of making money on them. They are more suited to a Warren Buffet style investment strategy rather than an aggressive short term day trader strategy. With a long term view, opals can be seen as really great investments. If you look at the last 50 years of black opals, they have steadily increased over time. We have never seen a decrease in value in gem quality black opals. New discoveries have become less and less over the years, and the scarcity and demand for good quality black opal has become much greater.

Investing in opals is somewhat similar to investing in Gold. They are a tangible asset so are not susceptible to market crashes like you get investing in stocks, currencies or cryptocurrencies. They enjoy a steady increase over time. Unlike Gold however, you cannot just walk into any bank or pawn shop and cash in. Opals do require some expertise in finding the right buyer for the stone. To maximise your chances here is to follow some basics when purchasing to ensure you are buying an opal that is easily sellable in the future. Tick the most boxes of basic principles when buying and you should not have a problem in selling for more money in the future.

example of an N1 Black Opal

A great example of an N1 Black Opal for investment

So what should you look for when purchasing an opal for investment?

Body Tone

Traditionally deeper body tone is better, however in recent years a lot of people purchase opals based more on their beauty rather than just the body tone of the opal. As an experienced opal buyer myself, I feel that it is important to consider both factors. If an opal is stunning but only has a lighter body tone, it should not be a deal breaker. If an opal has a deep body tone but is not bright, has boring color combination and no pattern, it is also not a deal making opal. It is important to consider a combination of many factors when purchasing an opal for investment.

Rarity of Colors

Common colors such as greens, deeper purples and ‘average’ blues are less desired than rarer colors in opals such as reds, rainbows and royal blues. Ensure you are choosing an opal with good quality colors and brightness. If you think the colors look stunning, of course others will as well! It always pays to ask your spouse / friends opinion on an opal too before purchase!

red opal

Red Opals are always viewed favourability in the market

Brightness and Quality of Polish

Always ensure that the colors in the opal are bright, and that the opal is well polished! It is also important to know that if the seller is associated with the mining or polishing of the opals they are selling, that a guarantee is offered for any potential future natural cracks in the opal. Natural cracks are rare, however they may occur if the opal has been cut too soon after being mined. A seller should stand by their opals quality and offer a guarantee; if they do not I do not recommend purchasing from them. Opal Galaxy offer a lifetime guarantee for natural cracks in our opals.

Rarity of Pattern

Owning a specific pattern such as ‘harlequin’ or ‘flagstone’ will hold high saleability over an opal that doesn’t have any sort of pattern. Choosing an opal based on its rare pattern, for example Chinese writing, pinfire or peacock pattern can tick many boxes over a more common pattern such as a simple flash or color play opal.

Size / Shape / Usability

Ask yourself when purchasing opal; what can this be used for? Most end buyers of opal want to set the opal in a ring or pendant. Is this opal ideal for a ring? How is the dome on it? What sort of setting will this opal suit (claw setting or bezel)? Are there any limitations to the setting because of some flaws in the opal (eg is there some sand on the edge that may look bad if setting in a claw with open sides?) What shapes are best for pendants? Often freeform shapes are less desired in the market than proper shapes such as ovals or teardrops. If the opal is a specimen; who do you intend to sell it to when you want too? It is much harder in our experience to sell a specimen opal rather than an opal that a jeweler can set.

Location of mine

People who are familiar with the geography of Lightning Ridge are usually able to tell the difference between a seam opal compared to a nobby opal for example. Seam opal from Grawin and Mulga are often viewed as more commercial grade opal. If comparing top quality seam to nobby opal for investment, 9 times out of 10 I would recommend to opt for nobby opal as they are often viewed more favourably in the market, and often have much deeper body tones and high domed oval shapes that comes from the formation shape of a nobby opal. Mining locations such as Allawah, Allahs Rush and what is commonly referred to as ‘town opal’ (mined close to the town of Lightning Ridge) are viewed very favourably in the market. When purchasing high end black opal for investment it is recommended to learn the location of where the opal was mined.

rare black opal

A very rare Allahs Rush field Black Opal

Price

The underlying most important factor to consider when purchasing an opal for investment is your initial purchase price. Make sure you compare the opal your considering with opals in the market. Is the opal your purchasing well priced? Can you see in the future this opal being worth more money? As much as any seller can recommend to you an opal for purchase, it is always important to do your own research!

Legality of Purchasing Opals for Investment

If you are purchasing an opal as an investment with the idea to decrease your tax payable (eg on behalf of a business), it is always important to check your countries tax laws. Here in Australia, and in many other countries in the world, laws require that gemstone investments for tax write off’s require the gemstone to be stored in a bank safe for the majority of its ownership.

If you are considering to purchase a black opal for investment and want to know our best recommendations, please contact us in regards to discuss.

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