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Cost of a flawless 5 carat diamond in the late 70s

diamondad

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Hello. writing a short story and trying to imagine what a flawless 5 carat diamond would cost (range) in the late 70s.

Also, what characterstics would you consider to be an exceptional stone: quality, type, cut, grade, color, etc.
looking for descriptive adjectives and technical terms for high-end stones/cuts.

Thanks!
 
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PintoBean

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2 words - "diamond p*rn"
 

AprilBaby

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My SIL got a 1 ct very nice diamond in 1979 and I believe it was $11,000. My itty bitty .35 was $365.
 

Wink

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When I started buying diamonds in 1975, a one carat D-IF was about $4,000/carat. my new friends in the industry were whining that only a couple of years ago it was about $2,500 per carat. By late 1979, Gold, silver and diamonds were all being touted as incredible investment opportunities for the average man by telephone sweatshop hoodlums with no care about how much they hurt the average man.

The Hunt brothers were trying to corner the silver market, and the feds raised the margin on a 5,000 ounce futures contract to 100% of the value. This destroyed the market for futures gambling (investing) instantly and the market was limit down for many days. If I remember correctly, silver fell from $50 per ounce to $16 per ounce before it could be sold. Some of my then best retail clients lost millions of dollars in a matter of days and never recovered. I remember hearing that the Hunts lost billions.

I had refused to acquire and sell 1,000 ounces of silver to a gentleman at $35/oz. and when it hit $45, he came to tell me he was suing me for his lost income. Two or three days later, while silver was crashing, he came back, apologized and thanked me for saving him the loss. I had another client come in and show me a 100 ounce bar he bought at sixteen dollars as the market was going back up. He told me he had ten more just like it. A few weeks later he came in asking if I could help him recover some of his money as the market was at about 8. It was only recently that he would have been able to have made a paper profit on that 1980 purchase. I wonder just how much opportunity cost he paid for that miserable investment.

When someone comes to you with a great deal, no matter how great it is, look long and hard. Even if it looks good, only play with money which will not hurt you if you lose it.

Wink
 

Polabowla

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Hello. writing a short story and trying to imagine what a flawless 5 carat diamond would cost (range) in the late 70s.

Also, what characterstics would you consider to be an exceptional stone: quality, type, cut, grade, color, etc.
looking for descriptive adjectives and technical terms for high-end stones/cuts.

Thanks!
Would love to read this story once it's complete!
 

glitterata

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@Wink, what a harmful period that was. People lost their shirts, and gorgeous, historic, irreplaceable silver treasures vanished into the melting pot. As a silver collector, I hate to think of it.

Of course, objects made of precious metals are weirdly ephemeral because they're always in danger of being melted down for the value of the metal. But that period was as bad as a war or a famine for its effect on silver. What I wouldn't give for a time machine to take me back to 1975 and a few thousand dollars to spend on 19h century silver when I got there. (I would also spend some time with my then-still-living father and have a few choice words with my young self, but that's a different topic.)
 

Rockdiamond

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While it’s true that D/IF stones skyrocketed, and hit $60k for a 1.00ct in about 1980- it was short lived. IIRC 4/4 ( 1.00-1.15) D/IF was about $15k at the time, Before and after the market soared and then crashed.
Still, very high compared to 2020, especially if we adjust for inflation. But even that was an anomaly. Most goods were sold sans lab reports in those days.
I think high color, well made 4/4 were about $3k per carat. Probably close to what the same sort of stone costs adjusted to 2020$

but the question was 5ct.......
Demand for large stones was less back then. In the ‘90’s, I worked for a South African site holder that told me they used to saw large pieces of rough to cut multiple 2cts instead of a 5+ carat stones. They sold faster and it made sense at that time.
I’d love it if we could get firm numbers- but I can ask some old friends to see if they remember how much larger D/IF’s sold for.
 

Garry H (Cut Nut)

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I think $36k per carat was a more realistic 1ct trading price as I recollect and 5ct D F today is about 6.3 times a 1ct = $227,000.
But as others like Wink have mentioned earlier the prices were way down till the boiler room boys got in on the act.
And Were 5cts trading at 6 times 1ct?
No idea.
Today this relationship holds well for commercial sizes:
1601101857671.png
 

diamondad

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When I started buying diamonds in 1975, a one carat D-IF was about $4,000/carat. my new friends in the industry were whining that only a couple of years ago it was about $2,500 per carat. By late 1979, Gold, silver and diamonds were all being touted as incredible investment opportunities for the average man by telephone sweatshop hoodlums with no care about how much they hurt the average man.

The Hunt brothers were trying to corner the silver market, and the feds raised the margin on a 5,000 ounce futures contract to 100% of the value. This destroyed the market for futures gambling (investing) instantly and the market was limit down for many days. If I remember correctly, silver fell from $50 per ounce to $16 per ounce before it could be sold. Some of my then best retail clients lost millions of dollars in a matter of days and never recovered. I remember hearing that the Hunts lost billions.

I had refused to acquire and sell 1,000 ounces of silver to a gentleman at $35/oz. and when it hit $45, he came to tell me he was suing me for his lost income. Two or three days later, while silver was crashing, he came back, apologized and thanked me for saving him the loss. I had another client come in and show me a 100 ounce bar he bought at sixteen dollars as the market was going back up. He told me he had ten more just like it. A few weeks later he came in asking if I could help him recover some of his money as the market was at about 8. It was only recently that he would have been able to have made a paper profit on that 1980 purchase. I wonder just how much opportunity cost he paid for that miserable investment.

When someone comes to you with a great deal, no matter how great it is, look long and hard. Even if it looks good, only play with money which will not hurt you if you lose it.

Wink
thanks for this info... so what would you estimate then in November 1979? and what is D-IF? Is that what you would say is a top diamond?
 

diamondad

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I think $36k per carat was a more realistic 1ct trading price as I recollect and 5ct D F today is about 6.3 times a 1ct = $227,000.
But as others like Wink have mentioned earlier the prices were way down till the boiler room boys got in on the act.
And Were 5cts trading at 6 times 1ct?
No idea.
Today this relationship holds well for commercial sizes:
1601101857671.png
thanks, so you would estimate about 36x6=210,000?
 

OoohShiny

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thanks for this info... so what would you estimate then in November 1979? and what is D-IF? Is that what you would say is a top diamond?

 

Rockdiamond

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thanks for this info... so what would you estimate then in November 1979? and what is D-IF? Is that what you would say is a top diamond?
Is there something about that specific date that has significance?
When you say “top diamond” do you mean price per carat?
 

diagem

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Demand for large stones was less back then. In the ‘90’s, I worked for a South African site holder that told me they used to saw large pieces of rough to cut multiple 2cts instead of a 5+ carat stones. They sold faster and it made sense at that time.
Sorry David, you make no sense on this one. Demand for large diamonds existed since society discovered the rarity factor of diamonds, after that, there would be takers for any large diamond offered (no exceptions in the 90's),.

Even during some of the darker periods of civilizations where getting proper value for some extreme examples such as very large or rare colored diamonds or ostentatious type jewels might have been a challenge, there would always be a value on them which would be significantly higher probability than if such would be further divided into smaller diamonds or objects.
 

Rockdiamond

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Sorry David, you make no sense on this one. Demand for large diamonds existed since.....snip
I’m not saying I agree- I’m saying that’s what the owners of Codiam told me they used to do years prior, and they told me this back in the late ‘90’s.
 

Rockdiamond

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Also possibly related........
A lot of the rough Codiam cut was cape.
I do remember the owners had a large yellow assher....it was sent to GIA when I was there- 15cts Fancy Vivid Yellow Internally Flawless.
So- maybe he was speaking of cape goods- that weren't going to finish darker than N-O color.....if the rough was super valuable- than not?
 

diamondad

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Is there something about that specific date that has significance?
When you say “top diamond” do you mean price per carat?
i'm writing a short story set in 1979 and want to put a price on a diamond that would be realistic for that time--either a 5ct diamond as original, but if it winds up being too expensive, I might have to write in a 2-3ct diamond, but I need it to be a supurlative stone to fit the story. thanks!
 

diamondad

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Well, I was privy to a five carat D-IF marquise shaped diamond transaction in Milan (1979) for approx. US$800,000.-- total., if this helps..
yes, it does, but I was getting a price of around $200k in earlier thread, but maybe I didn't understand. based on your $800k assessment, what would you say a flawless 2ct or 3ct diamond would be back then?
 

glitterata

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Doesn’t discuss 5 carat D FL, but does mention the change in price for 1 ct:
”Experts in the diamond industry agree that speculators caused the price of investment stones to rise dramatically when diamonds became a fad like stamps, coins or paintings as a hedge against inflation. From 1979 to 1980, a one-carat D-flawless stone rose in price from $10,000 to $65,000. (That's the time gold reached a high of $850 a troy ounce; gold has also plummeted nearly 50 percent since then.)”

@diamondad , is your character buying it for investment? For an engagement ring? From a fancy store like Tiffany’s or Harry Winston? From an uncle in the business? From a mobster? What month of 1979 is s/he buying it in? All those things could affect the price. Fortunately, since it’s fiction you have some wiggle room.

If you really want to know exactly and certainly, your best bet is to ask a reference librarian for help. Hard to do during a pandemic, I know.
 

AprilBaby

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Doesn’t discuss 5 carat D FL, but does mention the change in price for 1 ct:
”Experts in the diamond industry agree that speculators caused the price of investment stones to rise dramatically when diamonds became a fad like stamps, coins or paintings as a hedge against inflation. From 1979 to 1980, a one-carat D-flawless stone rose in price from $10,000 to $65,000. (That's the time gold reached a high of $850 a troy ounce; gold has also plummeted nearly 50 percent since then.)”

@diamondad , is your character buying it for investment? For an engagement ring? From a fancy store like Tiffany’s or Harry Winston? From an uncle in the business? From a mobster? What month of 1979 is s/he buying it in? All those things could affect the price. Fortunately, since it’s fiction you have some wiggle room.

If you really want to know exactly and certainly, your best bet is to ask a reference librarian for help. Hard to do during a pandemic, I know.
That’s true! If your character is high end shopping the price will be higher!
 

diamondad

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Doesn’t discuss 5 carat D FL, but does mention the change in price for 1 ct:
”Experts in the diamond industry agree that speculators caused the price of investment stones to rise dramatically when diamonds became a fad like stamps, coins or paintings as a hedge against inflation. From 1979 to 1980, a one-carat D-flawless stone rose in price from $10,000 to $65,000. (That's the time gold reached a high of $850 a troy ounce; gold has also plummeted nearly 50 percent since then.)”

@diamondad , is your character buying it for investment? For an engagement ring? From a fancy store like Tiffany’s or Harry Winston? From an uncle in the business? From a mobster? What month of 1979 is s/he buying it in? All those things could affect the price. Fortunately, since it’s fiction you have some wiggle room.

If you really want to know exactly and certainly, your best bet is to ask a reference librarian for help. Hard to do during a pandemic, I know.
this is good stuff... so story takes place in november 1979... the stone is being cut/polished by a diamond finishing co in the diamond district in manhattan. it's for a celebrity and it's a superlative stone/cut. the diamond is stolen, and i need to know what the value of that theft would be.
 

diamondad

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from the NYT article: "From 1979 to 1980, a one-carat D-flawless stone rose in price from $10,000 to $65,000." but that was for investment. this stone was being cut for jewelry, but it was for a celebrity, a special stone. But can you calculate that if 1ct was 10K, that 5ct was 50K? it's tough to pin down a number.

from the other article: "September 14, 1979 $30,000 per carat" but "March 5, 1980 $62,000 per carat"..."February 20, 1981 $41,000 per carat"

story and the theft takes place nov. 1979 but is being talked about in dec. 1980... so would be good to know what is was worth on both dates...
 

diagem

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Common sense timeline...

Nov 79' looks like in the middle of the investment hype period as such diamonds began to skyrocket, I would estimate a 1ct at around US$40-50k which would translate according to my estimations to at least US$400-600k for a five carat.

The value is a value, it doesnt really matter if it was for investment or for jewelry creation..., the inflated value was pretty much world wide.

Dec 80' was probably still considered the summit for the high value period as only around February - March 80' diamond values began to deflate.
Based on the five ct D-IF marquise transaction that am aware of which sold for US$800k back then, I would be comfortable using these numbers for any related articles if I was their author.

on a side....

A short but true story from that period..., an EU diamond dealer visiting NYC for business (one of many such trips annually) sold a one carat plus D-IF for US$80k, that same evening he met a friend for dinner and told him about the transaction which was considered incredible by any means, his friend who worked as a real estate broker at the time offered him to purchase an apartment situated somewhere on the upper east side of Manhattan for the exact same sum. He didnt and the rest is history!

Just imagine the magnitude of such and other inflated bubbles...
 
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