Are diamond prices supposed to go down?

[JP87]

I thought there was still oversupply in India ahead of GST implementation in July.

But then I was speaking to a vendor and they said "the price of extracting the larger rough needed for these size of diamonds is increasing" and that "That might pertain to regular inventory but when we're talking about a XXXXXX diamond that's not the case. Our specialized run of production makes up a minute portion of the global diamond inventory produced."

Just trying to think if I should make a purchase now or wait if prices will continue to fall!

 

[Texas Leaguer]

There is a chart here that could give you some insight on price trends. I don't think anyone knows whether diamond prices will go up or down. The market has bounced around for the last several years as demand has become more global and as India and China have become more influential. And as the chart shows, different sizes can have very different trend profiles.
https://www.pricescope.com/files/diamond-prices-per-carat.jpg

 

[ChristineRose]

If you want to really be impressed, check this page out.

https://grantspasscoins.com/2016/10/28/diamond-market-dropping-as-gold-surge-looms/

That's a page urging you to invest in gold. There are many similar pages urging you to invest in diamonds, and some of them post very different graphs. They do this by singling out colored diamonds, or diamonds over 2ct, or some other subset, and by picking the start and end years of their graphs very carefully.

One of the problems is that no one really needs a diamond. It's (probably) true that there are fewer large stones coming out of the ground, but once people reach their price limit they opt for a smaller stone, or no diamond at all. Conversely when diamond prices get high people with nice ones think more about cashing out. And there have always been trends: large, white, spready stones with minimal fire, antiques and antique cuts done on modern equipment, strong fluorescence, no fluorescence, pink diamonds, rows of melee in pave in halos--all have come and mostly gone in my lifetime. People tend to want what their peers are buying, and there's a uptick in small diamonds right now.

If you are looking to save money, you can always look to buy what's "out" right now, namely marquises.

 

[OoohShiny]

There is a chart here that could give you some insight on price trends. I don't think anyone knows whether diamond prices will go up or down. The market has bounced around for the last several years as demand has become more global and as India and China have become more influential. And as the chart shows, different sizes can have very different trend profiles.
https://www.pricescope.com/files/diamond-prices-per-carat.jpg

Thanks for posting the table, TL

Are the figures adjusted for inflation? Or is it just a graph of market prices?

I was just wondering, because if it's just straight figures, it looks like a 0.5-1ct stone now is almost the same price as in 2007, except that must surely mean they are actually cheaper now because of inflation devaluing currency over time?

 

[Victor Canera]

Diamond prices have been relatively steady for the past couple of years and I would agree that it’s very hard to tell which way prices go in the future.

I would take that chart with a grain of salt since I’m taking it at face value that the chart is based on “One Carat Top Quality Stone…” That peak at the beginning at least is definitely an outlier.

It’s a a well known historical fact in the 'biz that there was a cataclysmic event in the industry in the early 80s. This was sparked by speculation on top quality 1ct diamond i.e. D-F VS1+ stones. The prices did really reach near the $60K per carat range for these stones driven by speculators who would buy this specific quality and size on the premise that they would make money on the appreciation of prices in the future. When the market corrected itself, many people in the industry were completely wiped out and either filed for bankruptcy or just had to go out of business.

This was slightly before my time but colleagues in the generation or two before me still talk about it. The ones who were able to weather this event are considered the “survivors” of the industry.

My Best,

 

[totallyfree]

"Diamonds" are not a homogeneous product. If you think the particular type of diamond you want is likely to fall, then wait.

Personally I think that trying to 'pick' the market (like stocks) is a fools game, and you're better off researching what you want and getting the best value for your money in the stone, as well as the band and craftsmanship.

If you really want a 'good deal' then you should target decease estates, closing down sales or firesales or pawn shops. Of course you need to have a fair idea of what you're looking at, and those sellers rarely provide the detail (images and reports), or after sale service (refunds!) if the stone doesn't match expectations.

 

[Texas Leaguer]

I agree with totallyfree, trying to time the market is not a good strategy. Better to be focused on getting exactly what you want when it is available and when you are ready. Also agree that the second hand market is a way to potentially buy things at lower prices. But if you are locked in on certain parameters, options will be very limited. And information about the product may be very limited as well, requiring tolerance for some uncertainty and/or risk. It's important to know yourself and what you are willing to give up in pursuit of "the deal".

 

[denverappraiser]

People ask me this on a nearly daily basis. They genuinely expect a straight answer. It's the same with metals. Will gold go up or down tomorrow? These are questions for a psychic, not an appraiser, and if you ever find one who will tell you, I'll show you someone who is selling.