would the diamond price drop?

[greenriver]

looks like the price dropping trends just started...would the bigger diamond (2ct or 3ct) drop further?
we are not experts. Looking at the price trend chart, looks like there was a big price jump up in 2010, 30%, that's a lot. We non-experts worry about that 30% is going to "drop back and away"... Would it drop back to its 2009 or 2008 price?

What do you think? Thank you for any inputs.

 

[Piglet9j7]

I;m interested to know that myself. Everything else seems to be dropping - bonds, interest rates. I was just wondering today about the price of diamonds as I walked past several stores on Madison Ave.

ANyone else?

 

[AllThingsLuxury]

Of course the price of everything can drop from time to time. Just like Gold and Silver, the price of diamonds can fluctuate.

 

[Rockdiamond]

Of course no one can explain this fully- but it seems to me that when interest rates and bonds fall, hard assets - such as diamonds - become more popular if for no other reason that other investments seems less attractive

 

[TheGreatTwizz]

Trends to diamond prices show that 3ct+ is still strongly on the way up. The jump on the 1-2ct will probably stay in place as those sizes become more mainstream and the younger generation buys into the DeBeers 'two months salary' mantra perpetuated for decades.

 

[mrs jam]

There are two 2.5-ish ct. diamonds that I've been eyeing over at Blue Nile that have recently dropped in price, if that's any indication of anything. I've had them in my shopping cart to so I can find them quickly using their iPad app. When I looked at them again a couple of days ago, there was a message in my shopping cart that the prices of both had dropped. The same thing happened a few weeks ago with a 2.71 stone I had been watching.

 

[Rockdiamond]

mrs jam- would you mind sharing the type of percentage drop you saw- were these round diamonds?

 

[itzme]

OP, I was just wondering the same when I saw the chart a few days ago! It seems like the prices of the ones that are under 1ct are going down steeper. Has anyone else seen actual price drops in other sites? I'm crossing fingers for price drops in BGD or ID jewelry. Is that just wishful thinking? At what point do you actually see physical price drops?

When I went to a jewelry store a few weeks ago, they had a differentiation with pieces where they were charging "old gold prices" because they were older pieces, before the price increase, compared to "new pieces" with current gold prices. Not sure if stores also make that differentiation with "old" and "new" diamonds.

 

[MissStepcut]

No one has a crystal ball so all the polling in the world isn't going to get you a reliable prediction. Past behavior isn't going to tell you a dang thing about what's going to happen next (except, I suppose, that prices fluctuate). With that in mind, I'll decline to speculate.

 

[mrs jam]

mrs jam- would you mind sharing the type of percentage drop you saw- were these round diamonds?

Hi, one is a 2.67 J VS1 that has a current price of $32,106. When I initially put it in my shopping daydream cart, it was priced at $33,225. The other is a 2.51 and is also J VSi priced at 26,034. It was previously priced at $26,700. Do you have any idea how they determine their pricing fluctuations?

 

[greenriver]

I found an article about diamond pricing, here we go:
http://rough-polished.com/en/expertise/56963.html

I have made my decision to wait. And for some reasons now I can feel that "yes it will surely drop". Patience now becomes the money saver.

 

[denverappraiser]

Predicting the future is remarkably difficult but the pressures that are driving up diamond prices seem pretty unavoidable to me. Some biggies include:

1) The diamond engagement tradition is spreading around the world quickly. More brides in more places are interested in diamonds than ever before.
2) The population of the earth is increasing.
3) No significant new mines have been discovered in the last 20 years.
4) Wages in producing countries like India are on the rise.

These don't mean that prices are going to continue to rise but my guess is they will. Whether or not they will go up on your particular diamond is a different question. That includes components of fashion, how well you shopped in the first place and where you're shopping for the alternative to decide that prices are higher.

 

[bgray]

Predicting the future is remarkably difficult but the pressures that are driving up diamond prices seem pretty unavoidable to me. Some biggies include:

1) The diamond engagement tradition is spreading around the world quickly. More brides in more places are interested in diamonds than ever before.
2) The population of the earth is increasing.
3) No significant new mines have been discovered in the last 20 years.
4) Wages in producing countries like India are on the rise.

These don't mean that prices are going to continue to rise but my guess is they will. Whether or not they will go up on your particular diamond is a different question. That includes components of fashion, how well you shopped in the first place and where you're shopping for the alternative to decide that prices are higher.

I concur. Further as fear, insecurity and continued turmoil spread, there will continue to be a flight to things like gold, platinum and diamonds. I dont think (per Mrs Jam) that taking those two diamonds is a good sample size. larger J colored stones while likely quite lovely, are probably not the primary "investment stones" which are in my limited knowledge 1)typically rare colored/golconda or otherwise super rare, 2)large as in very important in size and 3)smaller 1 to 2 carat very high quality stones in the colorless range. Waiting for a price drop probably is worthwhile depending on what you are looking for...

 

[justinphilip]

Predicting the future is remarkably difficult but the pressures that are driving up diamond prices seem pretty unavoidable to me. Some biggies include:

1) The diamond engagement tradition is spreading around the world quickly. More brides in more places are interested in diamonds than ever before.
2) The population of the earth is increasing.
3) No significant new mines have been discovered in the last 20 years.
4) Wages in producing countries like India are on the rise.

These don't mean that prices are going to continue to rise but my guess is they will. Whether or not they will go up on your particular diamond is a different question. That includes components of fashion, how well you shopped in the first place and where you're shopping for the alternative to decide that prices are higher.

i get that if you're referring to the year by year increase but the sudden 20-30% increase this year can't be all based on reasons you mentioned. the population didn't grow that much

http://www.polishedprices.com/upload/Content/forc1111.GIF

http://www.polishedprices.com/upload/Content/PPOverall1111.GIF

 

[Lula]

greenriver, I think your instincts are correct and if you can wait to buy, you may see a drop in prices next year, or at least a leveling-off. I do think we will see a leveling off in demand from China and India as well, as they grapple with their own economic issues.
http://www.bloomberg.com/news/2011-...-25-as-europe-dims-demand-growth-outlook.html

However, my comments go toward the "engagement grade" diamonds most people are looking to buy. True investment grade stones, as bgray noted, will no doubt see an increase in price, along with precious metals, as investors look for a safe place to park their money, as we all wait for the global debt crisis to unwind.

In the U.S., I believe the high-end retailers will do okay over the holiday season. And the department stores that sell the low-end cr*ap (think filled and treated rubies and irradiated diamonds) will no doubt sell a lot of that stuff, as they always do. But the jewelers in my area who cater to the middle income customer tell me that the bottom has dropped out of all jewelry sales, except for engagement and wedding jewelry. Several have told me that there is essentially no market for colored stone jewelry. I have also seen stores trying to push older merchandise with the "this price is the old gold price" but to no avail; the stuff just sits there. At one local pawn/vintage store I visit, the owner has now removed every tray of vintage and estate jewelry from his shelves because he and his staff are too busy dealing with the steady stream of people coming in to sell their gold. The owner told me it's a waste of time for him to sell the jewelry he takes in; it brings more money as scrap. So this store is no longer a quirky vintage jewelry shop; they are a gold-buying business. Sad. This store has been in business for decades and it's not in a low-rent part of town either.

So, yeah, I think you are right to wait a little longer, to see what prices do, unless you're planning to put a Golcanda under your tree.

 

[denverappraiser]

David Epstein wrote a book a few decades ago forecasting the demise of the diamond business called ‘the diamond invention’. It’s a pretty interesting read and it still occasionally gets pushed forward as evidence of what a scam diamonds are. His core arguments that diamonds will DROP are:

1) There are a lot more diamonds out there than most people think. Worldwide, mines produce them by the ton.
2) There are a LOT of diamonds in hands of the public. Unlike most products, diamonds aren’t very perishable. Nearly every diamond ever mined is still in someone’s possession and could potentially be for sale.
3) The market has been historically controlled in some strange and even criminal ways and, to this day, there is market manipulation going on in a big way.
4) Gem diamonds aren’t very useful. That is to say, the market isn’t derived from any particular utility. People buy them because they love them, which is a fine reason, but people can be fickle and manipulated tastes change, sometimes rather quickly.
5) Labs can and do make excellent synthetics.

None of these things persuades me that the market is heading for a crash for reasons I listed in my last post but they are basically all correct. I continue think the long term prospects for gem diamonds as a product category look pretty good. As an investment vehicle I think they’re terrible for most people and I write and speak about this fairly often but this has to do with the problem of liquidity, not anything fundamental about diamonds themselves.

 

[greenriver]

greenriver, I think your instincts are correct and if you can wait to buy, you may see a drop in prices next year, or at least a leveling-off. I do think we will see a leveling off in demand from China and India as well, as they grapple with their own economic issues.
http://www.bloomberg.com/news/2011-...-25-as-europe-dims-demand-growth-outlook.html

However, my comments go toward the "engagement grade" diamonds most people are looking to buy. True investment grade stones, as bgray noted, will no doubt see an increase in price, along with precious metals, as investors look for a safe place to park their money, as we all wait for the global debt crisis to unwind.

In the U.S., I believe the high-end retailers will do okay over the holiday season. And the department stores that sell the low-end cr*ap (think filled and treated rubies and irradiated diamonds) will no doubt sell a lot of that stuff, as they always do. But the jewelers in my area who cater to the middle income customer tell me that the bottom has dropped out of all jewelry sales, except for engagement and wedding jewelry. Several have told me that there is essentially no market for colored stone jewelry. I have also seen stores trying to push older merchandise with the "this price is the old gold price" but to no avail; the stuff just sits there. At one local pawn/vintage store I visit, the owner has now removed every tray of vintage and estate jewelry from his shelves because he and his staff are too busy dealing with the steady stream of people coming in to sell their gold. The owner told me it's a waste of time for him to sell the jewelry he takes in; it brings more money as scrap. So this store is no longer a quirky vintage jewelry shop; they are a gold-buying business. Sad. This store has been in business for decades and it's not in a low-rent part of town either.

So, yeah, I think you are right to wait a little longer, to see what prices do, unless you're planning to put a Golcanda under your tree.

Thank you-- Not sure I can use this as an "investment". If I buy a 3 carat diamond for about $50K, how much would I be getting back if later on want to sell it? I guess half of what I paid, or even less... What is your experience?
Thanks again!

 

[marksperbug]

Of course no one can explain this fully- but it seems to me that when interest rates and bonds fall, hard assets -

 

[GemFever]

On a more short-term scale, do diamond prices tend to drop even a little after the major winter holidays, such as Christmas and Valentines day, or is that not a factor?

Great and informative posts in this thread, thanks!