Has the cost of LGD gone down in the last 6 months?

[TruLuv858]

Hey All...

About 6-8 months ago I was SERIOUSLY looking at diving into the world of LGD as I am suffering from DSS, shamelessly . I currently have a Beautiful 2.67 carat OMB from BE that we purchased about 13 years ago, that was once in a 3 stone setting and then reset in a Halo setting about 7 years ago. I originally had it reset because upgrading wasn't an option, and I wanted something a little more robust.
Back to m LGD journey...so, I was looking at 4-5 carat Emerald or Oval cuts, with about a $10K budget about 8 months ago. My Hubby wasn't to keen on the idea, and he ended up gifting me a Cartier Love Bracelet with 4 Diamonds to add to my bracelet stack- I mean, how does a girl say "No" to that?! So it kept my DSS at bay as I stared at my gorgeous new acquisition... Fast forward to now, and I just happened to stumble upon IDJ's loose LGD diamonds, and it appears (mind you haven't seen them in person), but they are priced under $3K for this size? Is that accurate? I feel like prices were more in the $8-$15k range for this size before? Hubby still isn't sold on the idea, and I haven't brought it up to him since my bracelet, but if the prices have gone down that much, I mean? Sounds pretty amazing. I don't foresee a really elaborate setting, especially if I go with an Oval?

TIA!

 

[DejaWiz]

For sure...the $4400 that bought my wife's surprise diamond upgrade (2.76 D VS2) last September is now yielding along the lines of this:

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...not that I would have gone with such a diameter.

 

[Garry H (Cut Nut)]

Hey All...

About 6-8 months ago I was SERIOUSLY looking at diving into the world of LGD as I am suffering from DSS, shamelessly . I currently have a Beautiful 2.67 carat OMB from BE that we purchased about 13 years ago, that was once in a 3 stone setting and then reset in a Halo setting about 7 years ago. I originally had it reset because upgrading wasn't an option, and I wanted something a little more robust.
Back to m LGD journey...so, I was looking at 4-5 carat Emerald or Oval cuts, with about a $10K budget about 8 months ago. My Hubby wasn't to keen on the idea, and he ended up gifting me a Cartier Love Bracelet with 4 Diamonds to add to my bracelet stack- I mean, how does a girl say "No" to that?! So it kept my DSS at bay as I stared at my gorgeous new acquisition... Fast forward to now, and I just happened to stumble upon IDJ's loose LGD diamonds, and it appears (mind you haven't seen them in person), but they are priced under $3K for this size? Is that accurate? I feel like prices were more in the $8-$15k range for this size before? Hubby still isn't sold on the idea, and I haven't brought it up to him since my bracelet, but if the prices have gone down that much, I mean? Sounds pretty amazing. I don't foresee a really elaborate setting, especially if I go with an Oval?

TIA!

Cost price fall has accelerated over the past year. On the current trajectory there is no reason to think retail prices would not halve again in the next year.
The reasons are the growers are now into slight oversupplying the market and retailers who were getting 4 times markups now have more competition and are only getting 3X.
This chart is from Tenoris with my extension predictions for the next 12 months.

 

[Rockdiamond]

It is an interesting time to watch….
So many “unprecedented“ sorts of shifts. Clearly, taken as an average prices have continued to fall. But the similarities to natural diamonds mean that there’s still a premium for the best stones. And like the natural market, the majority of goods are substandard in terms of cut, transparency, etc.
And in spite of the fact it’s a manufactured item, oddly enough certain segments are seeing some shortages. The best of the best growers and cutters seem to be holding back goods.
And we’re really close to a point where the actual utility, versus an artificial Rap list price will determine the bottom.

 

[0-0-0]

Considering it costs up to around $500/carat to recut at retail, I think there’ll be a pretty firm price floor for good material with good cuts.

 

[Garry H (Cut Nut)]

Considering it costs up to around $500/carat to recut at retail, I think there’ll be a pretty firm price floor for good material with good cuts.

In Surat the costs are about half the cost of certification.
What David says is accurate - there is a lot of variation - but the shortages he mentions will be in the mass HPHT small stones under half a carat out of China and the large plus 2ct CVD from India. This will grow over time.

 

[TruLuv858]

I am so happy The Trade experts chimed in, THANK YOU! It makes me wonder whether to wait another 6 months to this time next year even, but this was super eye opening. Always appreciate the insight here.

I am curious @Rockdiamond- are there specific cuts you are seeing the shortages with?

 

[Texas Leaguer]

As both @Garry H (Cut Nut) and @Rockdiamond mention, part of the average price decline is oversupply in inferior goods being traded at liquidation prices. While the technology continues to improve overall gradually bringing down prices, inferior goods bring down the average price and enlarge the price gap between the better goods and the problematic ones.

There is also a shakeout beginning on the supply side with some of the marginal growers leaving the market. This in the long run will support prices, but in the short term, they will be contributing to oversupply in the process of liquidating.

 

[Garry H (Cut Nut)]

As both @Garry H (Cut Nut) and @Rockdiamond mention, part of the average price decline is oversupply in inferior goods being traded at liquidation prices.
There is also a shakeout beginning on the supply side with some of the marginal growers leaving the market. This in the long run will support prices, but in the short term, they will be contributing to oversupply in the process of liquidating.

Bryan I find it hard to believe that having invested in the technology the poor growers are leaving the market? Those growers would be less able to move production to high end computer and science products then those able to grow high end material.
I see plenty of fine grown diamonds selling wholesale at -98 to -99.4% against rapaport price list ((why they still do that beggars belief).

 

[Willinformed]

As both @Garry H (Cut Nut) and @Rockdiamond mention, part of the average price decline is oversupply in inferior goods being traded at liquidation prices. While the technology continues to improve overall gradually bringing down prices, inferior goods bring down the average price and enlarge the price gap between the better goods and the problematic ones.

There is also a shakeout beginning on the supply side with some of the marginal growers leaving the market. This in the long run will support prices, but in the short term, they will be contributing to oversupply in the process of liquidating.

Are you able to elaborate on this for us layman's not in the industry. Inferior goods as in:
A) uncertified lab
B) certified but excess of lower graded stones
C) certified as upper graded stones but still inferior for qualities not graded for

Thanks

 

[Karl_K]

The company that can grow diamond camera lens quality at apple quantity levels is going to make mega bank that makes the jewelry market look like peanuts.
I see the bast growers eventually moving to other things.
That will leave a lot of bad crystal on the market for jewelry.
There is a good chance that good crystal will maintain a premium.
If I was producing good crystal I would be ringing the grading labs phones off the hook to put that info on the grading report.

 

[Mrsz1ppy]

The company that can grow diamond camera lens quality at apple quantity levels is going to make mega bank that makes the jewelry market look like peanuts.
I see the bast growers eventually moving to other things.
That will leave a lot of bad crystal on the market for jewelry.
There is a good chance that good crystal will maintain a premium.
If I was producing good crystal I would be ringing the grading labs phones off the hook to put that info on the grading report.

This. This is what I was told over and over again in NYC on the Christie’s course I did in June. It’s all about diamonds as chips, holding so much more data than silicon.

 

[Karl_K]

This. This is what I was told over and over again in NYC on the Christie’s course I did in June. It’s all about diamonds as chips, holding so much more data than silicon.

Yea, chips is another big area but the making of rough for polished diamonds and making diamond platters for chips are different.
Where the making of lens material is directly related.

For chips you want a platter 300mm round but just "775+/-20um" deep but could be thinner depending on the equipment used.
This is so they do not have to go back to the drawing board for billions of dollars worth of equipment.

 

[Garry H (Cut Nut)]

Yea, chips is another big area but the making of rough for polished diamonds and making diamond platters for chips are different.
Where the making of lens material is directly related.

For chips you want a platter 300mm round but just "775+/-20um" deep but could be thinner depending on the equipment used.
This is so they do not have to go back to the drawing board for billions of dollars worth of equipment.

Type II diamonds have been used in high end computer chips for decades. But because they remove heat about 4 times faster than silver or copper. All manufactured diamonds are type II - making type I is very expensive and hard to do.
Type II is twice as good at that as Type I.
I read somewhere diamond may have an application for quantum computing?

 

[Texas Leaguer]

Are you able to elaborate on this for us layman's not in the industry. Inferior goods as in:
A) uncertified lab
B) certified but excess of lower graded stones
C) certified as upper graded stones but still inferior for qualities not graded for

Thanks

Growing high quality diamond, especially in larger sizes, is not easy. A lab diamond can have transparency deficits from fluctuations in the growth process, or odd color tinges that are rarely seen in natural diamonds.

A lot of people got into the growing business that did not have the level of experience or expertise that the top growers possess. CVD technology in particular provided a much lower cost entryway for new growers.

In many cases some of the quality deficits do not show in a laboratory report - for instance subtle transparency deficits or certain color tinges. Therefore these stones can still be traded, often at more deeply discounted prices.

 

[Karl_K]

I am so happy The Trade experts chimed in, THANK YOU! It makes me wonder whether to wait another 6 months to this time next year even, but this was super eye opening. Always appreciate the insight here.

The real value with any jewelry is the enjoyment people get from it.
Will you get enough enjoyment over the next year to cover any price drops by waiting is a question only you can answer.

 

[Garry H (Cut Nut)]

In many cases some of the quality deficits do not show in a laboratory report - for instance subtle transparency deficits or certain color tinges. Therefore these stones can still be traded, often at more deeply discounted prices.

Excellent points Bryan and Karl
My great hope is that we will get transparency grading for natural diamonds via the transparency problem associated with man made diamonds.

 

[Texas Leaguer]

Excellent points Bryan and Karl
My great hope is that we will get transparency grading for natural diamonds via the transparency problem associated with man made diamonds.

That would be a great outcome Garry. I have said many times here over many years that transparency is a significant issue for many diamonds, and labs need to do a better job informing consumers. It impacts light performance yet cannot be properly understood from either a laboratory report or advanced imaging. And is difficult for a novice to detect even by in-person viewing.

As gem labs are dedicated to consumer protection, there is perhaps nothing they could add to their reporting that would be as beneficial to the consumer as a transparency determination.

There are a ton of "great deal" eye-clean Si stones out there (some VS2s) with transparency deficits. And no matter how well they are cut they inherently suffer from some loss of performance.

I wonder how many are being sold with full disclosure.

 

[Garry H (Cut Nut)]

That would be a great outcome Garry. I have said many times here over many years that transparency is a significant issue for many diamonds, and labs need to do a better job informing consumers. It impacts light performance yet cannot be properly understood from either a laboratory report or advanced imaging. And is difficult for a novice to detect even by in-person viewing.

As gem labs are dedicated to consumer protection, there is perhaps nothing they could add to their reporting that would be as beneficial to the consumer as a transparency determination.

There are a ton of "great deal" eye-clean Si stones out there (some VS2s) with transparency deficits. And no matter how well they are cut they inherently suffer from some loss of performance.

I wonder how many are being sold with full disclosure.

So we'll said Bryan

 

[Willinformed]

How would a layman definitively identify transparency deficits, for example in a VVS2 or higher lab diamond and they have access to see the diamond in person. An ASET scope?

 

[Garry H (Cut Nut)]

How would a layman definitively identify transparency deficits, for example in a VVS2 or higher lab diamond and they have access to see the diamond in person. An ASET scope?

The best way with videos is to look at diamonds with high res with the diamond mounted vertically between 2 pins (the single vertical and 360 laying down are close to useless). The high res of these are made with a series of +100 still photos stitched together in ViBox or DiBox2 (search via Lexus softmac). Look for grain lines (that are hard to see unless you are looking close to straight down the plane) usually parallel to the table.
in person is much harder for a non expert - best is to have a known nice diamond for comparison.