If the amped-up prices of gold and silver weren’t giving jewelers big-enough headaches, now they must contend with more-expensive diamonds.
De Beers on Feb. 11 reported its rough prices rose 27 percent throughout 2010, mostly due to strong polished sales in China and India, where gem demand has soared more than 20 percent. In February, India’s Gem & Jewellery Export Promotion Council estimated that rough prices in January were 27.2 percent higher than the previous year.
And it looks like diamonds will only get pricier: Louise Prior, spokeswoman for the DTC, De Beers’ sales and marketing arm, says the company “had mid to high single-digit increases on a number of our sight boxes” in February. She declined to say which rough diamonds would be increasing in value.
According to dealers, the jumps have been felt across the board.
“Basically, everything is going up,” says Jeff Fischer, owner of New York City’s Fischer Diamonds. “The market is overheated. VSs and SIs have gone up tremendously. D colors, in all qualities, are rising. The oversizes are impossible. Trying to find a 2.05 carat or 2.55 carat stone is very difficult. For a 2.85, it becomes a joke. Prices are just amazingly strong in light of what I would call satisfactory but lackluster demand in the United States.”
He says the higher prices have made retailers reluctant to buy for inventory—but when they do, they accept the increases. “When the jewelers have to buy, resistance is breaking down,” Fischer says. “I have customers, who, a year ago, when I would offer them a 20 percent discount off the Rapaport list, would say, ‘I want 30.’ Today, they are okay with 2 percent.”
Stuart Samuels, a principal of DTC sightholder Premier Gem Corp. in New York City, says that most retailers haven’t realized “the extent of the increases,” adding that he’s paying 15 percent more for diamonds than he did just a few months ago. “A sample category of rough that was selling for $1,250 in August 2009 is now selling for $1,730,” he says. “This isn’t American-driven, but retailers here are going to have to accept it.”
While Michael Greene, an owner of Wick & Greene Jewelers in Asheville, N.C., foresees challenges—“We’re no longer the drivers of demand in this country, so we’re going to see our supply go away and prices go up”—others view the changes as an immutable fact of life.
“The thing about diamonds is they go up and rarely go back down,” says Lawrence Hug, president of Hug Jewelers in Cincinnati.
*Note : Derived in real-time from actual asking prices of the global diamond industry, IDEX Online Diamond Prices objectively reflects price trends as they happen. The Diamond Index and Diamond Drivers were formulated following comprehensive research and analysis of the IDEX inventory database, aggregated since February 2001. Research and development were conducted in cooperation with Dr. Avi Wohl, Senior Lecturer of Finance at the Faculty of Management, Tel Aviv University.
This story appears in the April 2011 issue of JCK Magazine.