enough is enough..at what point will the consumers say...

[Dancing Fire]

"we will not buy diamonds at these level". +10% more? +20% more? +50% more?

i remembered in the spring of 2004 i could of bought a AGS 000 2.53ct H VS2 for $19,700. can we turn the clock back to 2004?

edit...the year was 2004 not 2005.

 

[slg47]

Re: enough is enough..at what point will the consumers say..

wow! I just did a search, the closest I could find were a 2.5 carat H SI1 for $23k, and a 2.4 H VS2 for $25k

 

[yssie]

Re: enough is enough..at what point will the consumers say..

Umm... There's a 2.8 J SI2 (0.1ct larger than my stone) on BN for 4k more than we paid for my stone *last year* - also trawled from BN. And J SI2s of that size are not exactly in terrific demand, methinks...

 

[CaprineSun]

Re: enough is enough..at what point will the consumers say..

Wow..... What's going on? & When will it end?

 

[sphenequeen]

Re: enough is enough..at what point will the consumers say..

...maybe as soon as we stop paying $4.50 a gallon for gasoline.

 

[John P]

Re: enough is enough..at what point will the consumers say..

Sorry folks. This has been predicted for some time.

There was a detailed forecast on PS in June 2010 (not-believed by some):
https://www.pricescope.com/community/threads/price-increases-in-the-diamond-market.144407/

Further discussion in January 2011 (Paul Slegers notes that prices may increase 10% this year):
https://www.pricescope.com/community/threads/diamond-prices-increased-by-3-000-in-one-month.155549/

Recent articles backing-up the forecasts Paul made long-ago.
http://www.idexonline.com/portal_FullNews.asp?SID=&id=35202
http://www.polishedprices.com/news/NewsDetails.aspx?NewsId=1000006815

*

For those wondering how this is sustainable: A primary reason is because competition is no longer between local USA jewelers for YOUR business or your neighbors... Now it's you and your neighbors (who may not be buying) versus the new wealthy-class overseas (who are buying).

An excerpt from my June 2010 review of Martin Rapaport's annual "State Of The Union:"
https://www.pricescope.com/communit...-the-diamond-industry-new-opportuniti.144415/

<< ...Countries which used to supply others are now home to a new generation of consumers. Wealth continues to shift to India and China, and these places are teeming with diamond consumers. There are 20-30 million new luxury consumers in India alone. This shift in wealth was clearly evidenced by attendees at the JCK show from China and India coming there to buy - not supply - to buy.

From a global perspective the US is weak. A domestic seller''s competition is not just across the street anymore. The jeweler in NY may want an H VS1 but someone in India or China can pay a better price, so he''ll get it. This happened before in a 1990s boom in the far east; there was a sudden absence of high clarity goods in the US market and jewelers here started selling more SI goods than ever before. With steady rise in foreign demand for rough and polished goods competition will continue to increase. China is already the second-largest consumer of diamonds worldwide, with millions of new consumers on the horizon... >>

And for anyone interested, here is more on the growth-potential of the Chinese market. I regret to say that we're only seeing the tip of the iceberg right now.
https://www.pricescope.com/journal/china-rise

<< De Beers reported that diamond sales in mainland China grew by over 15 percent from October 2008 through the first quarter of 2009. With declines in major markets such as the U.S., Europe and Japan due to the economic downturn this makes China, along with India, the only markets worldwide to maintain growth in diamond sales. Sun Wensheng, chairman of the Gems & Jewelry Trade Association of China, reported gross sales increasing by over 10 percent last year, reaching 180 billion Yuan ($24 billion). Experts at the Shanghai Show predicted that China’s jewelry industry should expect annual sales of 300 billion Yuan ($39 billion) and exports of over $12 billion by 2020. China is currently the world’s largest consumer of platinum, the second largest consumer of diamonds and the third largest consumer of gold. As the diamond engagement tradition continues to gain momentum, some experts say the predictions above may be conservative. >>

 

[Dancing Fire]

Re: enough is enough..at what point will the consumers say..

here's a price list of the "top ideal cut H&A stones" that i was considering in the spring of 2004.

GIA EX,EX 2.76ct I VS2 = $20,800
AGS 000 2.52ct I VS2 ACA = $19,000
GIA EX,EX 2.65ct H VS1 = $24,400
GIA Ex,Ex 3.02ct I VS1 =$28,049

could of bought all four stones for <$100K...

 

[Dancing Fire]

Re: enough is enough..at what point will the consumers say..

Sorry folks. This has been predicted for some time.

De Beers reported that diamond sales in mainland China grew by over 15 percent from October 2008 through the first quarter of 2009. With declines in major markets such as the U.S., Europe and Japan due to the economic downturn this makes China, along with India, the only markets worldwide to maintain growth in diamond sales. Sun Wensheng, chairman of the Gems & Jewelry Trade Association of China, reported gross sales increasing by over 10 percent last year, reaching 180 billion Yuan ($24 billion). Experts at the Shanghai Show predicted that China’s jewelry industry should expect annual sales of 300 billion Yuan ($39 billion) and exports of over $12 billion by 2020. China is currently the world’s largest consumer of platinum, the second largest consumer of diamonds and the third largest consumer of gold. As the diamond engagement tradition continues to gain momentum, some experts say the predictions above may be conservative. >>[/i]

JP...will India be the next China? ...so many rich Chinese and i ain't one of them...

 

[Paul-Antwerp]

Re: enough is enough..at what point will the consumers say..

Sorry folks. This has been predicted for some time.

De Beers reported that diamond sales in mainland China grew by over 15 percent from October 2008 through the first quarter of 2009. With declines in major markets such as the U.S., Europe and Japan due to the economic downturn this makes China, along with India, the only markets worldwide to maintain growth in diamond sales. Sun Wensheng, chairman of the Gems & Jewelry Trade Association of China, reported gross sales increasing by over 10 percent last year, reaching 180 billion Yuan ($24 billion). Experts at the Shanghai Show predicted that China’s jewelry industry should expect annual sales of 300 billion Yuan ($39 billion) and exports of over $12 billion by 2020. China is currently the world’s largest consumer of platinum, the second largest consumer of diamonds and the third largest consumer of gold. As the diamond engagement tradition continues to gain momentum, some experts say the predictions above may be conservative. >>[/i]

JP...will India be the next China? ...so many rich Chinese and i ain't one of them...

I know of big Indian offices, who do not send diamonds to their Antwerp-office (or their NY-office, for that matter) at this point in time, because they can sell at much higher prices in the local Indian market.

This eventually does not have an effect on pricing only, more important even is the effect on overall supply, which brings us back to the 'gaming-thread'.

Live long,

 

[diamondseeker2006]

Re: enough is enough..at what point will the consumers say..

What I wish is that the vendors would announce price increases before they take effect. I have been watching a few items that I'd like to buy and have seen large increases recently even on jewelry items with small diamonds. It kills me because I now don't feel that I want to pay 20% more for an item I was watching the day before. I know recently people were posting that Tacori was announcing a price increase as of March 1st, I think, which was great because those ready to buy could be sure they beat the deadline. Those not ready would pay the higher price but they would have had the opportunity. I can see their reasoning for wanting to just quietly raise prices, but for all the people in the process of making a decision, it is a killer to see prices increase on an item you were ready to buy any day. I saw it happen to someone else in the process of choosing a diamond here the other day.

 

[Tom Gelb]

Re: enough is enough..at what point will the consumers say..

Hello All,

Dancing fire, as to your specific example a 20-25% increase over a 7 year period averages out to less than 3% compounded annually, so you could have put that money in a CD and seen about the same increase, also about the same as inflation, so this makes sense in real dollars.

I agree that there has been an increase in demand and this will probably continue, but over the long term everything is cyclical and unless we are to believe that there really will be a shortage in supply over the long term, the price of diamonds will probably be similar to inflation. I am always a bit skeptical of long term resource supply shortages, especially in controlled markets like rough diamonds or oil exploration. If the prices do indeed rise then mines now considered out of the money will be sunk, and more would likely be found. In the short term anything can happen though.

Anyway that is my two cents, and that is about what it is worth.

Good luck

 

[Paul-Antwerp]

Re: enough is enough..at what point will the consumers say..

What I wish is that the vendors would announce price increases before they take effect. I have been watching a few items that I'd like to buy and have seen large increases recently even on jewelry items with small diamonds. It kills me because I now don't feel that I want to pay 20% more for an item I was watching the day before. I know recently people were posting that Tacori was announcing a price increase as of March 1st, I think, which was great because those ready to buy could be sure they beat the deadline. Those not ready would pay the higher price but they would have had the opportunity. I can see their reasoning for wanting to just quietly raise prices, but for all the people in the process of making a decision, it is a killer to see prices increase on an item you were ready to buy any day. I saw it happen to someone else in the process of choosing a diamond here the other day.

While a nice idea, I fear that this will not work in practice. This is why I have issued warnings about this already months ago, and I am still amazed with people not believing it, while they see it happening.

To go back to your suggestion, especially the vendors working with virtual inventory are at the mercy of their suppliers. When they decide to change prices (often related to a change in the Rapaport-list) their price changes overnight, often without exact warning and with no recourse.

For vendors owning inventory, they obviously decide themselves when to adapt to the market-prices. Some of those follow the market closely, others will be surprised when they go on their next shopping-trip.

In our case, we adjust prices when we find it necessary, but always give our dealers a grace-period for the deals already in process.

Live long,

 

[Karl_K]

Re: enough is enough..at what point will the consumers say..

What I wish is that the vendors would announce price increases before they take effect. I have been watching a few items that I'd like to buy and have seen large increases recently even on jewelry items with small diamonds. It kills me because I now don't feel that I want to pay 20% more for an item I was watching the day before. I know recently people were posting that Tacori was announcing a price increase as of March 1st, I think, which was great because those ready to buy could be sure they beat the deadline. Those not ready would pay the higher price but they would have had the opportunity. I can see their reasoning for wanting to just quietly raise prices, but for all the people in the process of making a decision, it is a killer to see prices increase on an item you were ready to buy any day. I saw it happen to someone else in the process of choosing a diamond here the other day.

online margins are such that the prices have to closely track the wholesale costs if a vendor is going to stay in business.
When exactly the price increases are going to take place and how much is hard to predict in advance.
The best we can do is say that they are coming and give what our opinion may be on how much with the information we have.
Paul is in a better position than most to keep us up to date on what is happening.
I also have posted warnings and information that price increases were coming based on information I had for months now.

While I may disagree with some of the reasoning given for the increases, there has been no question for months that there would be one for many reasons: the currency markets, government actions(cheap loans to businesses in some countries), dollar value, energy costs, producer policies, and some speculation all raised rough prices.

 

[oldminer]

Re: enough is enough..at what point will the consumers say..

Announcing price increases in advance. A very nice concept but one which can't happen with diamonds any more than it can with precious metal prices. Markets dictate new prices on an infinitely complex basis. Combine this with arbitrary forces which gather and sell rough diamonds in bulk packages to cutters at whatever price and selection the seller thinks the market will bear. Prices don't change overnight due to changes in cost, but they do change over a rather short period of time after dealers find that the higher prices are becoming accepted by willing buyers.

The complaint about diamond price escalation or the complaint about the price per gallon of gasoline is greatly mitigated by looking at what inflation has done to the purchasing value of the US Dollar. On an adjusted basis, things start to look much less confusing. Prices are not so much rising as dollars are falling......Chicken Little!

 

[John P]

Re: enough is enough..at what point will the consumers say..

JP...will India be the next China? ...so many rich Chinese and i ain't one of them...

The comparisons are already being made, but I don't know if "the next China" is appropriate. Having been to both places, there are fundamental differences in politics, infrastructure and philosophy which set them apart pretty significantly in my mind. But there is no doubt they - along with China - are influencing the West to East shift-in-wealth we're seeing.

India has been a labor-center for diamond polishing for some time - especially melee, though the average size is going up. Last year I was in Delhi and Surat and able to visit several different factories as well as Surat's public diamond district (insanity!). Apart from the booming diamond business being done (some factories sit four people at a single polishing wheel, in a row of a dozen wheels, with rows after row filling a massive warehouse-sized space) one can easily be overwhelmed by the sheer number of people per square mile, the absolutely loopy traffic habits that somehow work, and the endless, moving sea of humanity.

Less obvious, but having impact on a global scale, is the steady growth in their luxury consumer demographic. Between 2009-2010 that group grew by nearly 30-million people. This is causing a fundamental shift when it comes to diamonds: Where India used to supply the rest of the world we now see Indian buyers at trade-shows elsewhere in the world, buying to supply their own consuming public. Last month's Hong Kong show was explosively successful - which is no surprise, given the proximity to China and India. It will be interesting to experience the mood at JCK-Vegas in June.

 

[Dancing Fire]

Re: enough is enough..at what point will the consumers say..

...maybe as soon as we stop paying $4.50 a gallon for gasoline.

i did fill my gas tank with water but the car wouldn't start...

 

[John P]

Re: enough is enough..at what point will the consumers say..

More

http://www.diamonds.net/cms/getattachment/Price-Reports/Research-Report_March.pdf;;.aspx;.html

 

[Black Jade]

Re: enough is enough..at what point will the consumers say..

...maybe as soon as we stop paying $4.50 a gallon for gasoline.

Part of the problem is definitely that dollars are just worth less. This is part of the problem with price increases for everything from food to gold. We are having inflation. The government needs to stop printing money the way it has been doing. They put more money into circulation this way but its worth less.

We also just simply owe to much money. To--China, for one. We may have worse problems than that Chinese millionaires can afford diamonds that we can't soon if this goes on.

 

[tradergirl]

Re: enough is enough..at what point will the consumers say..

EXACTLY!

Announcing price increases in advance. A very nice concept but one which can't happen with diamonds any more than it can with precious metal prices. Markets dictate new prices on an infinitely complex basis. Combine this with arbitrary forces which gather and sell rough diamonds in bulk packages to cutters at whatever price and selection the seller thinks the market will bear. Prices don't change overnight due to changes in cost, but they do change over a rather short period of time after dealers find that the higher prices are becoming accepted by willing buyers.

The complaint about diamond price escalation or the complaint about the price per gallon of gasoline is greatly mitigated by looking at what inflation has done to the purchasing value of the US Dollar. On an adjusted basis, things start to look much less confusing. Prices are not so much rising as dollars are falling......Chicken Little!

 

[diamondseeker2006]

Re: enough is enough..at what point will the consumers say..

Let me just say that I was referring to current stock and not newly purchased stock. Vendors have been increasing prices at different times. One that I watch formerly was the most expensive and now that is not the case.

I think TraderGirl is right, though. Stop paying the ridiculous prices. I'll just have to shop ebay for my diamond hoop earrings, etc. and pay a price that is more reasonable to me since obviously retail prices are going to continue to rise because of other markets.

 

[Paul-Antwerp]

Re: enough is enough..at what point will the consumers say..

Let's try to put this in a more longer-term-perspective.

Prices of diamonds have not made a lot of upward movement in the past 20 years, and especially in the last 10 years, diamond-prices have lagged far behind other commodities.

It is one of the big criticisms against De Beers' in the past 10 years, that while they took their company private about 10 years ago, because the stock-market was valuing their stock of diamonds at zero, they clearly did not succeed in having diamond-prices follow prices of other commodities. Some observers clearly state that as a company, supposedly being a guardian of the industry, they failed absolutely. It is definitely sure that their suppliers are not the happiest when they assess performance of the past 10 years.

In all this, the current relatively fast increase in price-levels could well be a result of the diamond-market catching up after 20 years of almost standstill.

And the assessment of prices possibly changes completely if we step away from USD-terms. Depending on the country and its currency, current diamond-prices might well be lower than in 1991. And with the importance of the American consumer-market declining, that might well mean that there is still a lot of room worldwide for much higher price-increases.

All is relative, isn't it?

Live long,

 

[Black Jade]

Re: enough is enough..at what point will the consumers say..

^^Yes, that's what I was trying to say. The US dollar is part of the problem.

I have opted out. I feel lucky to still be able to manage some luxury purchases in this economy, where I know many MANY who are suffering. People who used to be be middle class and often still appear middle class on the outside but who have their lights shut off regularly and are at food banks. I go used now when I buy jewelry. I don't agree that there are no good deals at pawn shops anymore. The deals are actually better in my area. For bad reasons probably (others are letting go of their jewelry to pay for gas and maybe even food) but to me it is a solution to buy used, pay less, recycle (these diamonds are already in circulation, keep them going). there's a slew of graduations coming up and my nieces will get diamond earrings and pendants that they will appreciate, that their parents could not afford at full price, and feel special. The jewelry won't have all kinds of papers with it to prove it is absolutely the best cut jewelry in the whole world but thanks to Pricescope I know how to use a loupe and what to look for to make sure that it is well made and that it sparkles.

 

[dani13]

Re: enough is enough..at what point will the consumers say..

We all know that diamond prices have risen..but will prices drop back? Or is this a permanent increase?

 

[maplefemme]

Re: enough is enough..at what point will the consumers say..

JP...will India be the next China? ...so many rich Chinese and i ain't one of them...

The comparisons are already being made, but I don't know if "the next China" is appropriate. Having been to both places, there are fundamental differences in politics, infrastructure and philosophy which set them apart pretty significantly in my mind. But there is no doubt they - along with China - are influencing the West to East shift-in-wealth we're seeing.

India has been a labor-center for diamond polishing for some time - especially melee, though the average size is going up. Last year I was in Delhi and Surat and able to visit several different factories as well as Surat's public diamond district (insanity!). Apart from the booming diamond business being done (some factories sit four people at a single polishing wheel, in a row of a dozen wheels, with rows after row filling a massive warehouse-sized space) one can easily be overwhelmed by the sheer number of people per square mile, the absolutely loopy traffic habits that somehow work, and the endless, moving sea of humanity.

Less obvious, but having impact on a global scale, is the steady growth in their luxury consumer demographic. Between 2009-2010 that group grew by nearly 30-million people. This is causing a fundamental shift when it comes to diamonds: Where India used to supply the rest of the world we now see Indian buyers at trade-shows elsewhere in the world, buying to supply their own consuming public. Last month's Hong Kong show was explosively successful - which is no surprise, given the proximity to China and India. It will be interesting to experience the mood at JCK-Vegas in June.

"Moving sea of humanity" - how eloquently phrased, that's exactly how I find India, it is an "experience" you learn to surrender somewhat to and very much live in the moment.
I do wonder if the caste system will be affected. Are some people of lower caste experiencing an increase in purchasing power? Are they buying diamonds?
If so, will this have any significant impact on social status I wonder?

 

[Gypsy]

Re: enough is enough..at what point will the consumers say..

When women no longer believe the De Beers: Diamonds are Forever and Diamonds are a Girl's Best Friend ads.

I have bought beautiful sapphire center stone engagement rings for friends though. I think it's the best alternative personally.

 

[Amys Bling]

Re: enough is enough..at what point will the consumers say..

When women no longer believe the De Beers: Diamonds are Forever and Diamonds are a Girl's Best Friend ads.

I have bought beautiful sapphire center stone engagement rings for friends though. I think it's the best alternative personally.

Very true. Many people see owning/wearing diamonds as a display of wealth and I think that only adds fuel to the price increases..... And with these increases in price the idea of wealth being associated with diamonds is becoming more and more true.

 

[centralsquare]

Re: enough is enough..at what point will the consumers say..

When women no longer believe the De Beers: Diamonds are Forever and Diamonds are a Girl's Best Friend ads.

I have bought beautiful sapphire center stone engagement rings for friends though. I think it's the best alternative personally.

Very true. Many people see owning/wearing diamonds as a display of wealth and I think that only adds fuel to the price increases..... And with these increases in price the idea of wealth being associated with diamonds is becoming more and more true.

That's a very good point. I'm very thankful that I got my e-ring when I did!!

 

[John P]

Re: enough is enough..at what point will the consumers say..

Just a note that this is a thread from April which has been bumped-again, pursuant to conversation in this current thread:
Diamond prices - will they rise or fall

"Moving sea of humanity" - how eloquently phrased, that's exactly how I find India, it is an "experience" you learn to surrender somewhat to and very much live in the moment.

Hey cool ~ I are eloquent! Seriously though, thanks. It is hard to describe the sheer number of people - everywhere - unless you have been there... Four columns of bumper-to-bumper cars, carts, three-wheelers and camels in what we'd call a one-lane street, paying no attention to lanes or directions, motorcycles with four to six people aboard, train stations that look like a scene from Times Square at New Year's Eve any day of the week, people sleeping on the sidewalk as throngs of pedestrians and the occasional cow steps over or around them... And this is in "small" cities.

I do wonder if the caste system will be affected. Are some people of lower caste experiencing an increase in purchasing power? Are they buying diamonds? If so, will this have any significant impact on social status I wonder?

I can't imagine so. Not in the near future anyway. Again, it's a numbers game. Like in China, only small fraction of India's population is actually influencing the diamond trade. This is because only about 2-3% percent of all households in India have the buying power to acquire diamonds. The lower castes are far, far removed from this. But when India and China increase to only 3-4% apiece (still only the very peak of the top demographic) they'll actually be on-par with the USA in terms of the sheer number of households with "luxury spending power" at a basic level.

Relative to that thought, you might find this interesting. Jump down to the paragraph under "Rising Spending Power."
http://www.idexonline.com/portal_FullMazalUbracha.asp?id=33652

 

[Porridge]

Re: enough is enough..at what point will the consumers say..

Well this just sucks. I posted this question in a thread in Hangout, but I'm wondering, in simple terms - in your expert opinions, will the prices drop back down any time soon? Will I be able to afford those studs I was saving for any time this year??

 

[Imdanny]

Re: enough is enough..at what point will the consumers say..

DF, I think one gets to the point where "enough is enough" whatever reasons are used to justify large price increases e.g. in a single month.