Rapaport Introduces New 10ct. Price List

[diagem]

Is Rapaport running/trying to catch up with the soaring prices?


From Rapaport:

" Rapaport Introduces New 10ct. Price List
The Rapaport Diamond Report is pleased to announce that ten carat prices will now be incorporated into our regular weekly Rapaport Price List. Thirty and forty point diamonds have now been consolidated into 0.30-0.39 and 0.40-0.49 size categories. The introduction of the new price list comes about as demand and prices for very large diamonds reach record highs."

 

[lisa1.01fvs1]

I guess the rest of the world will out bling us in the US in no time.

Rapaport continues.....


The diamond industry is undergoing a period of great opportunity andchallenge as a rapidly expanding global economy creates unprecedentedwealth. Demand for large , fine quality, diamonds has increasedsignificantly over the past few years while supply has remained stabledue to natural scarcity. In some instances scarcity and the resultanthigher prices have increased demand for very expensive conspicuousconsumption diamonds. Surging global growth combined with a rapidly declining U.S. dollarhas pushed commodity prices to record highs while destroyingconfidence in the dollar as the primary international store of value.Over the past year, India and Israel have witnessed a 20% decline inthe dollar while Belgium has seen a 13% decline. Many diamontaires,having lost confidence in the dollar and expecting increasing largediamond prices due to a consistent imbalance between supply anddemand, now prefer to keep their wealth in diamonds instead ofdollars. This natural and rational development is having a noticeableimpact on the price level of large diamonds. While higher price levels that reflect the long term imbalance betweensupply and demand are sustainable, higher prices brought about byinternal diamond industry speculation are not sustainable and mayresult in significant financial loss. Members of the diamond trade areencouraged to consider at what price level they are buying diamonds.If the price level reflects reasonable sustainable broad basedexternal consumer or investment demand, the level of risk ismitigated. On the other hand if a significant component of the pricelevel is based upon internal diamond industry speculation that priceswill continue t rise, then even a slight short term decline couldcause a collapse. All prices are unpredictable and therefore all market positions carryrisk. Diamontaires that buy diamonds in order to sell them to specificcustomers through well established marketing channels have limitedrisk. Those that buy diamonds to hold them in hopes of ever increasingprices are subject to severe risk. Volatile market conditions dominatethe global economy and at some stage it is reasonable to expect atemporarily price decline. Trade speculators, particularly smallerplayers are not well equipped to handle a downturn and many can beexpected to dump and run. The current market situation evidences a relatively high level oftrade speculation in large diamonds. It is therefore prudent for us toadvise members of the trade to carefully consider the sustainabilityof the current price level before investing in diamonds. There isnothing wrong with trade speculation/investment in large diamonds andit is reasonable and given the current supply demand ratio it isrational to expect higher prices in the future. However, when thetrade pushes prices to levels well above what consumers or “normal”external investors are willing to pay and when the only incentive forbuying is an addiction to yet higher prices, the stage is being setfor trouble. While we are confident that diamond prices will increase significantlyover the long term, there is no assurance that they will continue todo so in the short or medium term. What we do know is that globaleconomic uncertainty and volatility is rapidly increasing and aslowdown if not a downturn in demand is most likely. The diamond tradewill be challenged to justify the price level of diamonds and how wellthey do so will depend on the industry’s ability to sell diamonds tocustomers that are not in the trade. So speculators beware. When the music stops will you have a chair?

 

[elmo]

Doesn't the warning against what he sees as hugely speculative pricing for such goods in dealer-dealer trading run counter to a standardized price list?