How often are diamond price updated with online vendors?

[Iamme]

Hello there,
So I've been watching diamond prices for a few weeks now... and noticed the chart that was on PS about diamond prices seemingly always going up in value. (there are some months they are down, but not often).

For folks who have helped a lot of people on this forum: how often do you see prices actually go up on diamond prices online? I would include all the PS vendors such as Whiteflash, JA, BN, etc...

I wonder if this information would help future diamond seekers know that they do (or do not) need to make a decision sooner rather than later if they want to save some $$.

Thoughts?

 

[Todd Gray]

The majority of the diamond business prices goods in accordance with the Rapaport Diamond Price Report, aka "Rap" which is published Thursday night at midnight, thus prices have the potential to change first thing Friday morning. There is another pricing index known as IDEX, which if I recall correctly runs on a similar schedule, I haven't looked at it in awhile. Many of the online vendors maintain their inventory by computer and thus have the capability for prices to adjust automatically in accordance with Rap.

Recent conversations / correspondence which I've had with diamond cutters in Antwerp indicate that rough prices have increased 6 - 20% for various qualities, thus it is reasonable to assume that polished prices will increase accordingly in the near future. And have been increasing for the newer production of some of the vendors whom I stay in touch with...

 

[WinkHPD]

The vast majority of online vendors take the bulk of their inventory from price feeds. That is why you can so often find the same diamond on so many sites. That means when Rap changes, the prices on those sites change. Since the sites do not actually own the inventory and must pay what the owners are charging that means that the price increases are not negotiable and are passed along within hours, if not minutes, of the changes. Actually with the functionality of computers, I suspect that the prices tied to the Rap report change simultaneously with the posting of the Rap prices.

I have even seen vociferous arguments between a buying vendor (selling to the public) and a selling vendor (selling to the trade) when the selling vendor raised the price to a buying vendor after the buying vendor had already quoted his client and had the diamond in his possession waiting for payment. With the extremely thin margins in the diamond world today you can imagine how the buying vendor felt when his profit margin disappeared in the stroke of an electron. I have yet to have this happen to me, and I would never use such a selling vendor again if it did, but such is the way of many in today's diamond world.

I know that many believe that the price for a given diamond should stay the same until it is sold, but economics do not allow this. If you are a cutter and have bought the rough, cut the gem, had it graded by a laboratory and priced it at market value, your hope is to sell it at market value and use that money to repeat the process. (Some years ago, Paul Slegers of Infinity Diamonds posted an article here about what happens when you misjudge the quality of a parcel of rough and end up being able to sell the diamonds for less than it cost you to produce them. It is not always rosy at the cutting end of the supply train. Perhaps someone can point us to that article, it was a very interesting read.)

If prices go up and you sell it for the price that you had it priced at before, you can no longer replace it at the previous cost and can only buy now a new stone at the current cost. If you do that long enough your inventory will continue to shrink until you are out of business.

Instead, you must sell it at the new higher price and spend the increased amount needed to replace it so that your inventory can continue to be replaced, and perhaps if you sell the gems enough times per year to grow. You can be sure, that with the cost of rough increasing as Todd mentions, the price of the finished goods is very likely also to increase.

Although there have been a few times when the overall market conditions did not allow this to happen, this is not likely to be one of those times. With the reduction in world wide production and the lack of new sources coming on line in the near to medium future, demand is outpacing supply, and that can only lead to one direction for pricing. (Currently there is only one large new source, a mine in Canada, that is expected to go into production in the next two to three years. It generally takes ten to twenty years for a new find to begin full production and there have not been many, if any, other major new finds in the past few years.)

To paraphrase a famous Chicago politician, "Buy early and buy often!"

Wink

 

[Dancing Fire]

When was the last time we saw diamonds drop in price maybe like about 11 yrs ago?

 

[Iamme]

Seems pretty straight-forward. If you find a diamond you like for the price you like... buy it. Don't wait since the price will just go up.