Price difference????

[athenaworth]

I bought mine in May of last year and something similar is going for $6,500 more now. It'd be a great investment if we knew we could get that much for them on the open market. They're not traded like solid gold/silver. But it's still fun to think about getting in at the right time.

 

[diamondseeker2006]

Lula, I think it is the rough that is seeing the big increases and therefore comes across as increases in all sizes and colors of stones.

Dreamer, good point! The advice here to young men is usually "don't finance...save and pay cash". But this is the perfect example of why that is NOT always true!!! Those who financed (reasonably) a ring 6 months ago would be better off than those who had saved for those 6 months for sure.

 

[Dreamer_D]

I bought mine in May of last year and something similar is going for $6,500 more now. It'd be a great investment if we knew we could get that much for them on the open market. They're not traded like solid gold/silver. But it's still fun to think about getting in at the right time.

Wait enough years and even the secondary market prices might exceed what was paid originally I suppose.

Lula I too would like to know the answer to that question you/Phoenix posed.

 

[Lula]

I bought mine in May of last year and something similar is going for $6,500 more now. It'd be a great investment if we knew we could get that much for them on the open market. They're not traded like solid gold/silver. But it's still fun to think about getting in at the right time.

And there's the rub -- diamonds in the sizes and color/clarity grades we buy to wear are not investments! So I would not finance the purchase of a diamond. Spend what you can afford (in cash) and put the amount you were going to finance into the stock market instead, and you'll come out ahead in the long run. Then you'll be able to afford a nice upgrade for a significant anniversary.

 

[Lula]

Lula, I think it is the rough that is seeing the big increases and therefore comes across as increases in all sizes and colors of stones.

Dreamer, good point! The advice here to young men is usually "don't finance...save and pay cash". But this is the perfect example of why that is NOT always true!!! Those who financed (reasonably) a ring 6 months ago would be better off than those who had saved for those 6 months for sure.

Yes, DS, it is the rough that's seen the big increases, but it's my understanding that lower color/clarity rough is not as rare as higher color/clarity rough, so why the jump in this more "available" rough?

If the price increases are simply due to increases in demand for .30 - .50 carat weight stones in higher color/clarity combinations, you'd think the prices of smaller, higher color/clarity goods would bear the brunt of this price increase (ETA: If indeed the majority of a diamond's price comes from clarity and color and size -- the so-called rarity factors -- and not cut, as we've been told), and the other color/clarity grades may increase slightly, but not to the extent we've seen here. Or are vendors financing their purchases of smaller, higher color/clarity diamonds on the backs of those of us who are willing to sacrifice color and clarity for size?

ETA: Yes, I'm playing advocate here, because I think informed consumers should examine all parts of this price increase -- supply, demand -- and not just fall for the "shortages" trap that is the hallmark of a bubble market. I'm not saying diamonds are in a bubble market, just that they *could* be.

 

[Lula]

I bought mine in May of last year and something similar is going for $6,500 more now. It'd be a great investment if we knew we could get that much for them on the open market. They're not traded like solid gold/silver. But it's still fun to think about getting in at the right time.

Wait enough years and even the secondary market prices might exceed what was paid originally I suppose.

Lula I too would like to know the answer to that question you/Phoenix posed.

Maybe I should start a new thread?

Anyway, re prices on the secondary market -- it will definitely be interesting to see if sellers receive more for their "used" pieces. I think certain ebay sellers are asking more (and, in some cases -- OECs and OMC's -- receiving more) for diamonds than they did a year or so ago.

Out of curiosity, I compared an April 2009 price list sent to me by James Allen (a function of their save-your-search option on their webpage) for stones in the .40 - .50 carat range, D - H color, VVS1 - VS2 clarity, (TrueHearts and Ideal cut parameters) to current prices for stones in this range, and found that prices have increased about 10% in two years (which is above the inflation rate).

Had I kept my AGS 0, .45 D, VS2 stone purchased from JA in 2009 for $1,070, I would not get anywhere close to $1070 for that stone (let alone the $1200+ that stone is selling for today) from a local jeweler/pawnshop, even on trade! My guess is they'd offer me the same $200 -- $300 now that they would have offered me then, had I kept it and tried to sell it locally -- so no appreciation in what I could get on the secondary market, even though prices have increased 10%!

 

[Garry H (Cut Nut)]

Some larger rough price rises have been in smaller sizes and not higher quality big rare stones

 

[Garry H (Cut Nut)]

There is a shortage of rough and the polished prices have not kept up with those rough price rises, so expect more to come.
You have a quantitaive easing for a second time on your currency and so for some nations the price has not risen anywhere that much.
Get used to it my dear American friends. As more and more diamonds move to the east and away from the west.
I heard that one Chinese firm is opening a new store every day...and they are big stores, so just the initial stocking not counting what they sell will be amazing - orders coming through for 1,000's of 1/2cts a day. GIA Mumbai is by all accounts grading huge numbers of 30 pointers destined for China, Indonesia etc.

The highlighted portion of Garry's response is what I don't understand -- the demand from Asia and India seems to be in smaller carat weights, higher color and clarity grades. Why, then, are we seeing such an increase in prices on diamonds with color and clarity grades that were formerly "safe bargain havens," e.g., color grades J and lower, clarity grades SI and lower? The demand for those stones is not ratcheting up at the same speed as the high-color-high-clarity-less-than-one-carat stones that make up the demand in these emerging markets, is it? Phoenix raised this question in another thread, and no one addressed it.

ETA: I have abandoned my search for two @ 30 point diamonds in the G color, VS clarity ranges, because there is very little available, and what is available is several hundred dollars more than it was a few years ago! This can easily be explained by the increased demand for stones in this size in higher color/clarity combos. But, still, culturally, G color and VS clarity are not as sought after as D-F colors and VVS clarity stones, if I'm understanding consumer preferences in Asian and Indian cultures correctly Maybe I'm not?????

Lula that seems plausable

 

[Garry H (Cut Nut)]

Anything from Argyle (brown tints) already went thru the roof.

Boy, you can say that again!
I know the Argyle pink prices have really skyrocketed!!!
I'm soooo happy now that I already grabbed the two Argyle pinks below . . .

Actually every time I bought one of these over the last 5 years I felt like I was crazy, nutty & loony, but now I'm really glad I did.
It was good timing as it seems I'm increasingly being priced out of the FCD market.

Kenny you better have a good safe bolted firmly to an imovable part of your home!
There are some stunners there!
And rare!

 

[Dreamer_D]

I bought mine in May of last year and something similar is going for $6,500 more now. It'd be a great investment if we knew we could get that much for them on the open market. They're not traded like solid gold/silver. But it's still fun to think about getting in at the right time.

Wait enough years and even the secondary market prices might exceed what was paid originally I suppose.

Lula I too would like to know the answer to that question you/Phoenix posed.

Maybe I should start a new thread?

Anyway, re prices on the secondary market -- it will definitely be interesting to see if sellers receive more for their "used" pieces. I think certain ebay sellers are asking more (and, in some cases -- OECs and OMC's -- receiving more) for diamonds than they did a year or so ago.

Out of curiosity, I compared an April 2009 price list sent to me by James Allen (a function of their save-your-search option on their webpage) for stones in the .40 - .50 carat range, D - H color, VVS1 - VS2 clarity, (TrueHearts and Ideal cut parameters) to current prices for stones in this range, and found that prices have increased about 10% in two years (which is above the inflation rate).

Had I kept my AGS 0, .45 D, VS2 stone purchased from JA in 2009 for $1,070, I would not get anywhere close to $1070 for that stone (let alone the $1200+ that stone is selling for today) from a local jeweler/pawnshop, even on trade! My guess is they'd offer me the same $200 -- $300 now that they would have offered me then, had I kept it and tried to sell it locally -- so no appreciation in what I could get on the secondary market, even though prices have increased 10%!

I was thinking of a time period of 20 years, rather than 1-2 years.

re:financing. My diamond rose in price by about $7000 in three years. Had I financed the $5k I would have financed to buy it then, using a 0% balance transfer credit card for the first 9 months and then transferred the remainder to a low interest line of credit, paying the total off within one year... well I won't to the exact math but I think I would have come out way ahead in the transaction.

 

[Lula]

Yes, Dreamer, I agree, that if you were disciplined enough (and I have a feeling you are; most aren't) financing your stone a few years ago would have saved you a good chunk of money. However, there's an opportunity cost involved in any spending, i.e., by choosing to spend your money on X, you forgo the chance to spend it on Y or Z instead. And in the long run (20+ years) stocks are a better return on your money than are other investments -- e.g, houses (we found that out, didn't we?).

I guess I am a bit of a cynic, having lived through the great diamond investment bubble of the late 1970s and early 1980s. My poorly cut, 0.43 carat, no-lab-report diamond of unknown color and clarity cost about $1,000 in 1979. I sold it for a few hundred dollars in the late 1980s to a local estate jeweler and used the money to travel to Europe (back then you could fly Icelandair out of Chicago cheaply; round trip tickets were about $400). In 2000, I paid $1,070 for a 0.45 carat, AGS 0, D color, VS2 clarity stone. There were 30 years between those two purchases.

ETA: And, yes, rising demand in India and Asia has a lot to do with the price increases (though I'm still not sure what that has to do with price increases on a 1.25 K SI1, unless those are selling like hotcakes in India). But there's another side to the story -- investors are looking to "commoditize" diamonds (they've tried before and failed). See this December 2010 article, also from Bloomberg:

http://www.businessweek.com/news/20...talismans-of-magic-into-commodity-assets.html

This is what concerns me when I see consumers advising other consumers to "buy now" and suggesting financing diamond purchases as a "hedge" against rising diamond prices -- I'm not sure we're seeing the full story here, and I'd hate to encourage anyone to go over budget to essentially buy into a bubble.

ETA: Okay, I'm done now; off my soapbox; don't want to get in trouble with the powers that be...

 

[kenny]

Anything from Argyle (brown tints) already went thru the roof.

Boy, you can say that again!
I know the Argyle pink prices have really skyrocketed!!!
I'm soooo happy now that I already grabbed the two Argyle pinks below . . .

Actually every time I bought one of these over the last 5 years I felt like I was crazy, nutty & loony, but now I'm really glad I did.
It was good timing as it seems I'm increasingly being priced out of the FCD market.

Kenny you better have a good safe bolted firmly to an imovable part of your home!
There are some stunners there!
And rare!

Thanks Garry.
Actually I they live in a dark safe deposit box in a bank vault where I don't have to worry about them.

 

[kenny]

The burglars are going to have to settle for this "diamond".

 

[Dreamer_D]

Yes, Dreamer, I agree, that if you were disciplined enough (and I have a feeling you are; most aren't) financing your stone a few years ago would have saved you a good chunk of money. However, there's an opportunity cost involved in any spending, i.e., by choosing to spend your money on X, you forgo the chance to spend it on Y or Z instead. And in the long run (20+ years) stocks are a better return on your money than are other investments -- e.g, houses (we found that out, didn't we?).

I guess I am a bit of a cynic, having lived through the great diamond investment bubble of the late 1970s and early 1980s. My poorly cut, 0.43 carat, no-lab-report diamond of unknown color and clarity cost about $1,000 in 1979. I sold it for a few hundred dollars in the late 1980s to a local estate jeweler and used the money to travel to Europe (back then you could fly Icelandair out of Chicago cheaply; round trip tickets were about $400). In 2000, I paid $1,070 for a 0.45 carat, AGS 0, D color, VS2 clarity stone. There were 30 years between those two purchases.

ETA: And, yes, rising demand in India and Asia has a lot to do with the price increases (though I'm still not sure what that has to do with price increases on a 1.25 K SI1, unless those are selling like hotcakes in India). But there's another side to the story -- investors are looking to "commoditize" diamonds (they've tried before and failed). See this December 2010 article, also from Bloomberg:

http://www.businessweek.com/news/20...talismans-of-magic-into-commodity-assets.html

This is what concerns me when I see consumers advising other consumers to "buy now" and suggesting financing diamond purchases as a "hedge" against rising diamond prices -- I'm not sure we're seeing the full story here, and I'd hate to encourage anyone to go over budget to essentially buy into a bubble.

ETA: Okay, I'm done now; off my soapbox; don't want to get in trouble with the powers that be...

Excellent points all, Lula. Your example of your own purchases over the years is interesting. I will be curious to see what happes to diamond prices over the next 5-10 years, then, to see if this is a bubble. I am like you, in that I would not typically finance luxury purchases. I think in the special case of people who explicitly have the intention to upgrade it *could* be a good consideration. On the other hand, one never knows what the future holds. I ended up with my upgrade stone after 3 years of saving and upgrades. But I could have easily ended up in a different financial situation, and opted NOT to upgrade 3x in three years paying cash, if finances did not allow. And if I had financed I would be up the creek with debt I could not afford, in the same bad financial straights. So you are probably right about the idea of financing.

Still, it hurts to look back and think about potentially saving $6000!

And I would hope the comments you are making would not get you in trouble with anyone around these parts.

 

[coati]

Yes, Dreamer, I agree, that if you were disciplined enough (and I have a feeling you are; most aren't) financing your stone a few years ago would have saved you a good chunk of money. However, there's an opportunity cost involved in any spending, i.e., by choosing to spend your money on X, you forgo the chance to spend it on Y or Z instead. And in the long run (20+ years) stocks are a better return on your money than are other investments -- e.g, houses (we found that out, didn't we?).

I guess I am a bit of a cynic, having lived through the great diamond investment bubble of the late 1970s and early 1980s. My poorly cut, 0.43 carat, no-lab-report diamond of unknown color and clarity cost about $1,000 in 1979. I sold it for a few hundred dollars in the late 1980s to a local estate jeweler and used the money to travel to Europe (back then you could fly Icelandair out of Chicago cheaply; round trip tickets were about $400). In 2000, I paid $1,070 for a 0.45 carat, AGS 0, D color, VS2 clarity stone. There were 30 years between those two purchases.

ETA: And, yes, rising demand in India and Asia has a lot to do with the price increases (though I'm still not sure what that has to do with price increases on a 1.25 K SI1, unless those are selling like hotcakes in India). But there's another side to the story -- investors are looking to "commoditize" diamonds (they've tried before and failed). See this December 2010 article, also from Bloomberg:

http://www.businessweek.com/news/20...talismans-of-magic-into-commodity-assets.html

This is what concerns me when I see consumers advising other consumers to "buy now" and suggesting financing diamond purchases as a "hedge" against rising diamond prices -- I'm not sure we're seeing the full story here, and I'd hate to encourage anyone to go over budget to essentially buy into a bubble.

ETA: Okay, I'm done now; off my soapbox; don't want to get in trouble with the powers that be...

Oh stay on that soapbox.
Here's more on the bubble.

Diamond Prices and the "Bubble" Question
http://www.jckonline.com/blogs/cutting-remarks/2011/04/13/diamond-prices-and-bubble-question

IDEX Online Rough Diamond Market Report: Is It A Bubble?
http://www.idexonline.com/portal_FullNews.asp?id=35110

 

[FancyDiamond]

Let me share one data point for diamond price increase. Early this year, my girlfriend was thinking about trading in her 1.38ct E VS1 GIA ExExEx (HCA around 1) stone. We did price check using the PS database. The online price for her stone was 25% more than what she paid (around early 2009). Due to the large difference, she hesitated. Today, the conversation was brought up again, and I went to check prices for her. Guess what? Today, her diamond now costs a whopping 58% more! I can only conclude that diamond prices are insane now.
Of course, it does not make sense to trade-in, because she gets back only what she paid but has to cough up a lot more for the new stone. This is why I think the so-called benefit of "trade-in" is really no benefit. Imagine how I feel about paying extra for this "benefit"?

 

[charlottejw]

You paid more for the "benefit" of an upgrade policy. An upgrade policy and buyback programs are similar to buying a "put option" they go up in value when prices decline and they are still valuable with stable prices. The value of these benefits decline when prices rise, I wouldnt be frustrated that you "wasted" money by paying more with a retailer that offers these programs. You paid to protect yourself from falling prices and to have the option to trade in at no cost if prices are stable. It's like saying after the fact that paying for insurance is "wasting" money because you didnt use it. And to all those people claiming that maybe financing is a good idea... good lord using one example to prove that it can work financially to justify a very risky strategy is questionable. Even the Jan 2009 purchase example, assuming that prices have risen 58% which seems a little aggresive for the overall diamond market. Had you WAITED to buy and instead left the money in the S&P 500 you would have had a 50-64% gain in your money (depending on what day you are assuming in January). So ironically even in a period of very heavy diamond price increases picked by a person to demostrate how bad it has been you would have been in exactly the same place waiting and staying invested in the stock market. Granted the market can go down... but so can Diamonds (1980's) and if you think that Diamond prices are going to continue to increase like this, just remember how certain everyone was that housing was going up forever.

Lets be honest the reason that everyone is saying that "diamonds have gotten too expensive for me" is because the prices increases have been rapid and people are looking back at what they were a year ago. The only thing that would cause a SUSTAINED increase in diamond prices is if supply were truly limited and the yield from mines was going down (any significant LT change in the supply/demand dynamic), given that it is largely a single firm dominated market and they control supply to keep up prices I dont think that this is currently the case

 

[FancyDiamond]

Granted the market can go down... but so can Diamonds (1980's) and if you think that Diamond prices are going to continue to increase like this, just remember how certain everyone was that housing was going up forever.

Lets be honest the reason that everyone is saying that "diamonds have gotten too expensive for me" is because the prices increases have been rapid and people are looking back at what they were a year ago.

Point #1
"You paid more for the "benefit" of an upgrade policy. An upgrade policy and buyback programs are similar to buying a "put option" they go up in value when prices decline and they are still valuable with stable prices. The value of these benefits decline when prices rise, I wouldnt be frustrated that you "wasted" money by paying more with a retailer that offers these programs. You paid to protect yourself from falling prices and to have the option to trade in at no cost if prices are stable. It's like saying after the fact that paying for insurance is "wasting" money because you didnt use it. And to all those people claiming that maybe financing is a good idea... good lord "
Thanks for helping me see that light. Now that I know the true meaning of upgrade/buyback policy, I think in my future purchase I shall ask for compensation for declining this option. I want freedom to shop from any vendor for more diamond options and best price.

Point #2
"using one example to prove that it can work financially to justify a very risky strategy is questionable. Even the Jan 2009 purchase example, assuming that prices have risen 58% which seems a little aggresive for the overall diamond market. Had you WAITED to buy and instead left the money in the S&P 500 you would have had a 50-64% gain in your money (depending on what day you are assuming in January). So ironically even in a period of very heavy diamond price increases picked by a person to demostrate how bad it has been you would have been in exactly the same place waiting and staying invested in the stock market. "
I think the "extreme" example that you are using to "justify" huge diamond increase is inappropriate. For the majority of diamond buyers like me, we view buying diamond as luxury indulgence rather than serious investment. If I were to hold off buying diamonds a year ago, I would have left the money in my bank account earning less than 1% interest instead of taking huge risk betting on the market. I keep my investment separate from luxury indulgence. Mindset and strategy must be different.

Point #3
"The only thing that would cause a SUSTAINED increase in diamond prices is if supply were truly limited and the yield from mines was going down (any significant LT change in the supply/demand dynamic), given that it is largely a single firm dominated market and they control supply to keep up prices I dont think that this is currently the case,"
I thought someone pointed out the main reason for the price increase was DEMAND and not diminshed yield from mines. The huge increase in demand is from China.

 

[Black Jade]

Like Lula, I got engaged in the early 1980's when diamonds REALLY cost. I can relate to a lot of her story. I got what was called a 3/8 with no cert (it's somewhere between .38 and .42) for $600 in 1982. It was considered a large stone. Us girls knew that our mothers and grandmothers had larger but didn't compare ourselves to them, somehow. I still can't think of my original diamond as 'small' (unlike Lula, I still wear mine) and never expected to get a whole carat (in 1982, a D IF one carat cost $60,000. That was 1982 dollars andthe equivalent of maybe $180,000 now?)

I started buying diamonds again (or my hubby started buying them for me) with our 25th anniversary in 2008. We bought one ring in June and a pair of earrings in October, just after the financial crash. The atmosphere was very good for buying diamonds in October 2008--for obvious reasons. We could not afford the same earrings now. I looked them up at the same place back in March when these price increases started and they would then have been 20% more than what we paid. If there has been an even more recent price increase in April/May, it must be worse. But it had been interesting to me to see that they had stayed the same price from October 2008 to February 2011. That had actually seemed a bit odd. One was .90 and one was .91, so I did end up getting the formerly unbelievable 1 carat (well, almost), not just one, but two of them. I have sons and what I was thinking when I bought was that eventually each earring could become an engagement ring, or a diamond for daughterin law for an anniversary when I pass, but reading Pricescope a lot I would wonder sometimes if any daughter in law would sneeze at them; the expectations just seemd so different. I kept being shocked (and still am) whenever I look at the 'smaller diamonds' section and realize that '1 carat and under' means that a .90 center stone e-ring would fit in there! But on the other hand, I couldn't help noticing that around here where I live in average America, very few people have one carat -erings (or .90 erings). And since the financial crisis, the rings the young girls get have gotten smaller. Most of them get .25 or .33 total weight when they get engaged. It used to be around .50 total weight (that means, with sidestones of some kinds) 3 or 4 years ago. I guess they are not competing with the Chinese or the Indians because they don't get D,E,F VVS or IF in these small sizes, either.

It just all makes me think how easy it is to get high expectations. I have a lot of friends who are adopting orphans from the Ukraine in the past five or six years. (To put things in a little mroe perspective, do you know that to adopt a child from the Ukraine costs $20,000? You could still get quite a bit of diamond for that price). These are not people who want children because they have infertility or something like that--they all have several children of their own already adn they are adopting older children, usually pre-teens who have led a life of privation and struggle. they msot often adopt girls, because, frankly, if you adopt a pre-teen girl from an orphanage in the Ukraine, you are saving her from be forced into a life of sex slavery, definitely. When the girls get sixteen, they are dumped out of the orphanages with no skills and there are predators waiting. I won't go into all of this, most of you probably know it already--and the horror stories of the 'Natashas' (which is what they call the Ukrainian prostitutes) are all over the internet. The point is, when they adopt these girls their instinct to give them everything at once and really spoil them to make up for the horrible, deprived life they have led up to this point (unbelievable to us who grew up here even in very poor families). But the counselling they get is to take it very easy and not to give them a lot of things when first adopted, because if you do, their expectations immediately become incredibly high and its difficult to impossible to keep up that level of giving them things over the long term. I just wonder if we (myself included) have not gotten to that point in the US in general--where our expectations of what we can and should get and of what is 'normal' have become so high that it's now impossible to keep on that level. And we get unhappy as a result. I am definitely grateful that I found out about Pricescope and got some beautiful things, but I switched to the secondary market some time ago and am even getting out of that now(it's kind of hard to keep feeling that you need to spend another $10,000--or even $1,000) on a diamond when you already have diamonds--and you see your friends with much smaller diamonds, spending money that would buy them huge diamonds saving kids from degradation instead.
I hope I don't sound lectury, which would be very bad, or even worse, that I don't sound like someone who has gotten my share and now is telling everybody else that they need to be satisfied with less that I got! I am just thinking out loud here--and wondering about myself. I am sorry the market has risen so much recently not just with diamonds but with a lot of other things (it is getting hard to feed a family in my area even for middle class people--our church food bank is begging for donations, which did not used to be the case in this fairly affluent looking area). I haven't adopted any Ukrainian orphans myself so don't deserve any credit for anything! (We do have a bipolar son, which would make that difficult--but maybe that is an excuse I make to myself?) But reading this thread this morning, I just started to wonder about the expectations, especially my own.
I do think diamonds are so beautiful and I definitely can't bash people for wanting them. Well, I 'm repeating myself so time to end.

 

[affguy]

From the perspective of someone shopping for an engagement stone (who doesn't have the option to wait out an extended bubble), it seems that prices are currently going up on a daily basis. I've expanded my budget by almost 50% over what I started out wanting to spend a couple months ago, and am still not seeing what I want. Admittedly, my expectations have risen too (which doesn't help when trying to value shop), but I'm starting to accept that indecision is hurting my options and at some point I'll have to pull the trigger on something either substantially smaller or lower quality than what I'd hoped for.

 

[Dreamer_D]

Even in this bubble consumers who trade in come out ahead in terms of gross out of pocket money spend on diamonds. The subjective value of a trade-in policy depends on the subjective value you attach to the diamond you have, and how you mentally calculate "cost".

One person might think that they are taking a loss by trading in a stone presently worth $10k for the $6k they paid and then adding another $10k to get an upgrade -- "I would lose $4k! I should keep my original diamond and buy a new one! Then I will own diamonds worth $26k but I will only have spent $22k!" That way of thinking means there is more value in NOT trading up.

Another person might look at it and think their total gross outlay is what matters, not the current retail value of diamonds they own, so they might calculate total outlay to keep the original and buy a new one versus to trade in the old one for the new one, "Keep my stone = $6k + $16k = $22k. Trade my stone = $6k + $10k = $16k. I should clearly trade in my stone!" In that way of thinking, trade up policies are very worthwhile.

FancyDiamond you seem to fall into the former camp, whereas I fall into the latter. And you can get a discount for choosing to pass up the trade up policy -- it is built into the pricing of vendors, so buy from vendors with no policy and you will save the fee!

 

[Dreamer_D]

And to all those people claiming that maybe financing is a good idea... good lord using one example to prove that it can work financially to justify a very risky strategy is questionable.

Good lord....No need to be snarky about others opinions when giving yours. Clearly you know best and the rest of us are blooming fools, but please cut us know-nothings some slack

 

[Rhino]

There is a shortage of rough and the polished prices have not kept up with those rough price rises, so expect more to come.
You have a quantitaive easing for a second time on your currency and so for some nations the price has not risen anywhere that much.
Get used to it my dear American friends. As more and more diamonds move to the east and away from the west.
I heard that one Chinese firm is opening a new store every day...and they are big stores, so just the initial stocking not counting what they sell will be amazing - orders coming through for 1,000's of 1/2cts a day. GIA Mumbai is by all accounts grading huge numbers of 30 pointers destined for China, Indonesia etc.

Yep. And as one who has been involved now in the buying, overseeing and cutting of rough I can attest as I've been on the front lines in this too. At this time just to have the opportunity to purchase rough, forget about the price, is a small blessing. The high quality rough moves quickly and at high prices. Rappaport is not even realisitic in many instances these days. If you don't bid fast and pay the price it will go in a wink to the Chinese and Indian's.

Regarding the prices, I was probably the last of the "in house" distributors to bring my prices to current market values which is why things may seem sharp in a relatively short time on our site. Just about all of my competitors did this considerably before I did. All we can do is roll with the punches.

Kind regards,
Jonathan

 

[charlottejw]

wasn't trying to be "snarky" but I feel like it is very questionable advice to promote financing a luxury purchase out of fear of rising prices. I value your opinion on these forums and was not trying to be overly critical, but that type of thinking to me is what gets people into a lot of trouble over-strectching themselves.

 

[Frenchcut]

It's certainly not a good idea to buy in fear the prices may increase, especially if you have to finance your purchase. As everyone knows prices can go up or down and no one can know for sure what's going to happen next...

The real question is: do you feel comfortable to spending that much money on a ring? As long as the answer is yes it shouldn't matter too much whether the prices are going to increase or not.

 

[WinkHPD]

<Snip>

Lets be honest the reason that everyone is saying that "diamonds have gotten too expensive for me" is because the prices increases have been rapid and people are looking back at what they were a year ago. The only thing that would cause a SUSTAINED increase in diamond prices is if supply were truly limited and the yield from mines was going down (any significant LT change in the supply/demand dynamic), given that it is largely a single firm dominated market and they control supply to keep up prices I dont think that this is currently the case

I think you are holding on to an old fact that is now a myth in our industry. Debeers no longer controls and dominates the world diamond market. Their share has shrunk to around 30 - 35% and they are currently in negotiations with one of their largest suppliers (Botswana) and if the negotiations do not end well then they will be down to controlling 10 - 15% percent of the market. Still huge, but no longer dominating.

As a point of fact, supply is truly limited and the yield from the mines is going down and there have not been significant finds for many years now. Add to this the FACT that it takes normally at least ten years to bring a new mine into production, coupled with the fast growing demand from China and India and you do in fact have a significant change in the supply demand dynamic.

Rapidly increasing prices will be the norm for at least three years in many projections and long term increases are expected to continue for at least the next ten years.

As a retailer I wish it was not so, but we all know what wishes get you...

Wink

 

[charlottejw]

Wink that is good information. It is interesting to get the perspective of people that are closer to the market. The Diamond market has never been a good place for transparency (at least from the regular consumer perspective). I was under the impression that Diamond mining was still generally operating under a cartel type structure, but you information indicates that is not the case. That could make the supply/demand imbalance very troubling over the next couple years. One interesting thing about the diamond market is that the lack of a futures market (like many commodities have) makes it difficult to speculate on price movements. This lack of speculation could prevent prices from adjusting as quickly. Is there anyone in the market currently stockpiling rough that you have heard? Did the major diamond mining companies drop production during the recession and are taking some time to ramp back up?

 

[diagem]

There is a shortage of rough and the polished prices have not kept up with those rough price rises, so expect more to come.
You have a quantitaive easing for a second time on your currency and so for some nations the price has not risen anywhere that much.
Get used to it my dear American friends. As more and more diamonds move to the east and away from the west.
I heard that one Chinese firm is opening a new store every day...and they are big stores, so just the initial stocking not counting what they sell will be amazing - orders coming through for 1,000's of 1/2cts a day. GIA Mumbai is by all accounts grading huge numbers of 30 pointers destined for China, Indonesia etc.

The highlighted portion of Garry's response is what I don't understand -- the demand from Asia and India seems to be in smaller carat weights, higher color and clarity grades. Why, then, are we seeing such an increase in prices on diamonds with color and clarity grades that were formerly "safe bargain havens," e.g., color grades J and lower, clarity grades SI and lower? The demand for those stones is not ratcheting up at the same speed as the high-color-high-clarity-less-than-one-carat stones that make up the demand in these emerging markets, is it? Phoenix raised this question in another thread, and no one addressed it.

Garry gave you an example of just 'one Chinese firm'. There are a few more in China and also in India et al.
It's called a chain reaction Lula. Obviously demand is not just smaller carat weights, higher color and clarity grades (anymore as it used to), and since Diamond prices are breaking records on a daily basis even the potential clients for the segment you've mentioned are in need to downgrade to the 'safe bargain havens' as you call them. These safe havens fill a vacuumed space left behind.
As example to a proven phenomena..., the watch Industry segment is currently puting on a fierce fight for the steady supply of (super high quality) tiny melee they require bringing the prices to unheard levels in a very short period, do you think the 2nd or even 4th quality level is trading at the same old prices?

 

[Gypsy]

Another person here that's not buying diamonds, of any size, due to increases.

I bought my Aurora band, got my diamond halo redone and had a necklace made at the start of the year. I was feeling guilty but now I'm just feeling lucky. If I wanted to do any of that now I'd have to pay so much more.

I was planning on getting studs this year but I told hubby NO DIAMONDS FOR ME unless they are pre-owned and at a really good price. I just can't imagine paying current prices for studs. DS you are lucky you got yours when you did!

 

[Laila619]

Gypsy, I feel lucky too. With the current prices, I probably won't ever upgrade again. I still have dreams of owning an AVC one day though. Ah well.

Even settings are way more expensive now. Last summer, I was pondering a simple solitaire for $450. It's now $900!