The World of Jewelry and Gemstones

Being short one crystal ball, I am reluctant to forecast market prices on anything, but the circumstances that present themselves in today’s diamond market are compelling. A diamond importer who had recently returned from a diamond buying trip in Antwerp, described the market conditions as the worst he had seen in his lifetime. He told me that he was reminded of the diamond market of the late seventies and early eighties. During this time period the price of a 1 ct. D flawless diamond increased from a few thousand dollars to $70,000 in 3 years. He told me that he had customers willing to pay anything for 1 ¾ ct. and 2 ct., G-SI1 diamonds, but he couldn’t even find one to look at.

Here are some of the reasons we will probably experience higher diamond prices:

• Increased demand from emerging markets such as India and China.
• De Beers has increased the prices on rough diamonds eight times in the last two years. Cutters, wholesalers, jewelry manufacturers, and retailers have absorbed a significant portion of these increased prices by cutting their profit margins. Margins at current levels are not sustainable. Prices will probably increase this Christmas season.
• In recent decades, many of the new diamond mines have produced small and low grade diamonds.