Stock Market and Diamond Relationship

[kingfish]

Hi,
The drop on wall street got me thinking. I am wondering what the relationship is between diamond price and the stock market. I''m going to be buying an e-ring by the end of the year and wondered if prices would be going up or down based on the economic situation. On one hand, a diamond would seem to be more of a secure investment (such as gold or platinum) in these uncertain times. However on the other hand, diamonds are more of a luxury purchase, and people may put off buying an e-ring in tighter times, and may be less likely to propose, so demand might go down. Or there might be no relationship at all. Has this been discussed before? Any thoughts?

I''m going to be buying my ring in November and am wondering if I should take any precautions to get the best diamond for my dollar.

 

[dragonfly411]

From what I understand, diamond prices are consistently going up and that is based on finite availability. They are a luxury item and should be viewed as such.

 

[dbsdiamonds]

http://timesofindia.indiatimes.com/Business/Rough_diamond_prices_rise_16/articleshow/3404905.cms

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSL2588626720080425


Every indication is that the "squeeze" on raising rough prices will continue. I''m sure for you it depends on what category of diamond size and quality you are shooting for. If you are searching in a size/quality where there is an abundance of comparables then I wouldn''t expect much change.

If you are in a rarer pricepoint or size/quality range then it would only take a few buyers to reduce your options and therefore signal higher pricing.

No doubt Debeers and other monopolistic powers within already have their contigency plans in place to counter the US slowdown, evident by pushing hard in India, China and Russia while prices here have escalated despite of our economy.

Marty
CEO/Pres
Diamond Brokerage Service, Inc
www.dbsdiamonds.com

 

[js_diamond]

Well, I read that the price of gold has already gone up. I would buy now and not wait personally.

 

[oldminer]

If you shop well, you will find that bargain prices at competitive B&M retailers will be prevalent during the rest of the year. Those special retailers who feel they need not be as competitive may choose to more or less hold the line on pre-Christma sales. The great names of the retail business tend to be in a better position to stay above the competitive arena although seeing as what has recently occurred in the stock market, no one seems exempt and we are in for a roller coaster ride. Hang on tight.

I don''t think Internet vendors whill lower their selling prices since their mark-ups, in general, are nominal to begin with. Maybe Blue Nile with its higher than average mark-up might have a special pricing policy at some point. Who knows?

I think the best advice is to inform yourself and stick to a reasonable budget which does not put you in debt. Cash and liquidity is going to be important in the coming months. Only consider a diamond as an "investment" in happiness and as a gift. Don''t worry over the liquid value like you should with a stock or a bond. Those are investments with very different character than anything related to gemstones.

 

[oldminer]

The consequences of what is taking place are often not properly understood.

The following was COPIED FROM KITCO.COM

Gold falls as dollar strengthens, crude slumps
By Moming Zhou, MarketWatch
Last update: 10:48 a.m. EDT Sept. 16, 2008Comments: 21NEW YORK (MarketWatch) - Gold futures fell Tuesday as slumping crude-oil prices reduced demand for gold as a hedge against inflation and as a strengthening dollar added downward pressures on dollar-denominated gold prices.
Gold for December delivery lost $4.5, or 0.6%, to $782.50 an ounce on the Comex division of the New York Mercantile Exchange.
The benchmark crude-oil futures contract slumped more than 5% Monday. It was trading down another 5% early Tuesday. Falling crude prices tend to add downward pressures on gold prices as they ease inflation concerns. See Futures Movers.
"Oil is a big contributing factor [in gold''s drop]," said Jon Nadler, senior director at Kitco Bullion Dealers. "The most intense pressure is coming from funds and investors scrambling to get out of anything that bears any price risk."
On Tuesday, the focus of the financial crisis shifted from Lehman Brothers, which declared bankruptcy early Monday, to American International Group, as four rating companies downgraded the insurance giant.
In the wake of deepening financial crisis, investors withdrew from the stock markets. U.S. stock dropped as nerves were further frayed by worries about AIG''s ability to raise capital and lackluster results from Goldman Sachs Group.
Putting further downward pressures on gold, the U.S. dollar strengthened against the euro and the British pound after the Labor Department reported the first decrease in consumer prices in nearly two years. U.S. consumer prices declined 0.1% in August, the Labor Department reported Tuesday.
The dollar index (DXY:US Dollar Index Future - Spot Price
News, chart, profile, more
Last: 78.86+0.12+0.15%

10:31am 09/16/2008

 

[denverappraiser]

It’s worth noting that diamonds are a global marketplace for which the US is but a small part. Although some people here may be inclined to buy a smaller stone than they would have a few years ago, there are plenty of folks overseas who are upsizing. Things are looking up in Russia, India, China and many other places.

Btw. A ‘secure’ investment in platinum dropped 11% today and has lost more than half of it’s value since it peaked in May.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Jewelry Appraisals in Denver

 

[Dancing Fire]

Date: 9/16/2008 10:33:05 AM
Author: js_diamond
Well, I read that the price of gold has already gone up. I would buy now and not wait personally.

where have you been? gold is down $300 from its high. plat is down 50% from its high.