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RAP prices_calling the experts

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Phoenix

Phoenix

Ideal_Rock
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i''ve been reading some other threads about diamond prices (eg. WF etc.) going up horrendously recently and was wondering how this can be happening. As far as I know (and I may be wrong here), Rap hasn''t really changed that much during the last few months (I was looking for a while but haven''t kept a close eye on Rap since I found my stone in August). Prices are supposed to follow Rap (at least loosely).
 
thanks, Neil. but have "retail" (not sure if people like WF and GOG can be called that) prices really gone up that much and why?
 

Prices on certain stones have gone up more than others but yes, some are up steeply in the last year or two. A lot of this has to do with foreign currency issues and a lot has to do with the increasing popularity and consequently competition to get certain stones. The Rapaport pricing matrix doesn’t include all of the variables that go into most dealers' pricing, especially cutting, and those variables are exactly the ones that trade at a premium. Some of what you see may be that the big Internet dealers are discovering that they can't offer quality products and services with single digit margins and they are either raising their margins to cover their costs or reducing their costs (and quality) to drive down prices. The dealers you specifically listed are generally recommend for their accuracy of grading and their willingness to go over backwards to assist a customer. These are not 'free' services.


Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 
I understand, thanks.

Just out of curiosity, how much, % wise, would you say "ideal" cut (I know, there are many definition of what constitutes "ideal", but well-cut, let''s say) stones, RB, 3 carat and above have gone up over the past 6 months and same question for larger stone, say over 8 carat?
 

It’s not the same for all stones and for all markets so there’s no way to answer your question without a ridiculous list of qualifying statements. 3.00 VS1, F Ideal is a pretty difficult call and even at that it’s not standardized. 3.40, SI2 I would be much easier to find (although still difficult). The prices are not the same from dealer to dealer even on the same stone, much less for different stones at different times. I suppose it would be possible to look at historical asking prices for superficially similar offers from each of the various dealers and look for a pattern but I don’t have access to that data.


I’m not trying to be coy or obtuse, it’s simply not a question that can sensibly be answered. Contrary to popular belief, diamond are NOT a commodity.


For what it’s worth, the US Dollar is down against the Indian Rupee by about 3%.


Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 
I guess I wasn''t being specific enough, but I was only trying to get a "feel" as to how much diamonds of similar size, colour and clarity (and I know cut plays a huge part) have gone up, say, in the past six months. I not looking for precise figures or answers, just a ball park figure as to how much "superficially similar" diamonds have gone up by, ie. those within a certain colour and size range. I know a meaningful answer woudl require analysing historical data using all kinds of statistical models and making all kinds of assumptions.

It''s just that everyone seems to be saying that prices have gone up hugely in the past few months, but how much is "hugely"? I looked at a 2.04 carat (or sthg like that, just over 2 carat) princess cut D IF, very good cut, two years ago and that was going for about USD30k. There is no way I could get anything like that for that price these days. However, when I was looking seriously (ie. almost everyday) between May and August this year, asking prices by dealers/ B&M sellers for (their own) same stones did not seem to nudge up that much within that period of time (though of course, from seller to seller, prices can vary greatly for similar stones).

Perhaps someone other than Neil who has been looking to purchase a diamond for the past six months or even past three, four months can answer my question? Usually when one looks for a diamond, one would concentrate on the same range - size, colour, clarity, shape and even cut. So that would give me some idea at least.

Just being curious..is all!
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Rap has become a blunt instrument.

http://www.idexonline.com/ has a diamond pprices section that is real, live and connected to actual trading.

Click on diamond prices and you can see many sizes have fallen - but 3ct for instnace is still very strong.

Rap has become far to importnat to many contractual agreements ased on rap that if he raises it - they kill him, and if he lowers it - the other side kill him.
I would not be in Martin''s shoes for all the wonderful tea in China.
 
Thanks, Garry. That's very interesting. All along I've thought that diamond prices just keep going up and up, and of course over a long period of time they do, but it is interesting to see that they do go down some times.

It's interesting also what Neil said about diamonds not being a commodity, unlike wheat, orange juice, crude oil etc. which are. Those interested can check out this link: http://en.wikipedia.org/wiki/Diamonds_as_an_investment

And no, I wouldn't like to be in Martin's shoes either but isn't it amazing how Rap have come to be so important, both to buyers and sellers alike.
 
Rap is not exactly an accurate indication of price, Idex is better, Richard Druckers "the guide" is better than that... While diamond prices escalated quite a bit over the past two years and then levelled off a few months back, the per carat price on Rap barely moved in either direction. During the two year period of increase, our (cutter to dealer) prices increased in the form of reduced discounts off of Rap from our cutters - so if we were used to buying a diamond at a certain percentage off of Rap (in the trade we say "in back of Rap") that percentage of discount was decreased and thus the price of each diamond increased to us and subsequently to our customers - most of the vendors including ourselves tried to soften the blow to our customers by decreasing our profits. Eventually diamond prices evened out a bit and prices are certainly pretty good right now, but the reality is that diamond prices tend to increase over time so there is no good or bad time to buy because the odds are that you''ll pay more per carat a year from now than you will pay if you buy now - and the cost of labor to cut the stones, insure the stones, ship the diamonds to the labs for grading and have them graded and shipped back is ever increasing. Note that diamonds of better make such as round brilliant ideal and princess ideal will always cost significantly more than diamonds of lesser cut quality. I think that consumers really open Pandora''s Box when they try to buy diamonds Off Of Rap because they rarely understand the complexities of the market and truly how "the report" is intended to be used - this includes the index provided by Idex and The Guide. We wrote a page called The Rap Trap a few years back and shortly after received a phone call from Martin Rapaport regarding the page, his comment was along the lines of we really nailed it - pertaining to how customers "can be" mislead by jewelers who mis-use the report to explain to customers as to how they are getting the deal of the century because they are buying this diamond at this or that percentage off of Rap... People tend to be unaware that simple things like what seem to be minor changes in the combination of crown and pavilion angles have a significant effect on the price of a diamond - an ideal cut diamond with a 34.5 degree crown angle and a 40.8 degree pavilion angle will routinely trade for more than a "comparable" ideal cut diamond with a crown angle of 34.5 degrees and a pavilion angle of 41.2 degrees - why? Because the odds are that it will exhibit more light return! Likewise, a VS-2 with a feather as the primary grade maker will trade for a little more than a VS-2 where the grade maker are a few tiny diamond crystals - but the public rarely realizes this - they just run from store to store asking "What is the cost of a one carat, F, VS-2?" and "How does that price compare to Rapaport?" (hoping that this makes them sound like a more savvy consumer) and the jeweler (who doesn''t always understand the inner workings of Rap themselves) says "this diamond is selling for 25% in back of Rap" and the customer says "Wow! And it''s lab graded? Cool, the store up the street tried to sell me a diamond ''just like that'' for 25% over Rap!" and the jeweler says "yea, that guy buys his diamonds from me..." (you think I''m kidding, but the other dealers are laughing right now because this is what we hear all day long) and so the customer buys "the deal of the century" and (hopefully) takes it to an appraiser who runs a Sarin (OGI/Helium/computerized proportions analysis) on the diamond and says "the proportions of this diamond are equivelent to AGS-4 Good" and the customer says "but the jeweler told me that it was Ideal - look the total depth is 60.7% and the table is 55%" and the conversation declines from there...

Rap. Pandora''s Box. Yup.

You know what is a good indicator of price? Run a search for the diamond you are looking for here on PS - the prices reflected are accurate representations of what things are selling for because the prices are based upon actual diamonds which can be compared accurately by their characteristics... Get copies of the lab reports and sort them by polish, symmetry, proportions, clarity and color. Separate ideal cut diamonds with a total depth of 60.3% from those with a total depth of 62.3% because they are not "the same"... Then compare the average crown and pavilion angles with the understanding that those with a crown angle between 34.3 - 34.8 degrees and pavilion angles between 40.6 - 40.9 degrees are not comparable to those with crown angles like 35.3 degrees and pavilion angles of 41.2 degrees. Be sure that you''re comparing Fuji organically grown apples to Fuji organically grown apples and not that you''re not clumping all apples into a bushel by barrel price. Compare diamonds with GIA paper to GIA paper, AGS paper to AGS paper. Then get a Sarin report that shows the facet-by-facet break down for the crown and pavilion areas. Separate those that are consistent in facet consistency from those that are not. Then compare the inclusion type, location and extent and separate those that are similar from those which are not. I think you''ll find that the prices are quite similar for diamonds that are truly comparable at this point and that the prices are lower for diamonds which initially seemed to be of "comparable quality" based upon the initial results. Ultimately, you''ll serve yourself best by finding a dealer or two who you are comfortable with and who you can relate with and ask them to assist you in finding a diamond which best fits your needs, desires and price range - and an independent appraiser who you are comfortable with to verify their work (see the appraisers resource page here on PS available via the resources tab at the top of this page).
 
Great post, Todd. We really miss you around here.

Or did you notice that I went over 1,000 posts last week, and you do not want me to catch up? Anyway, you have a way of explaining certain stuff like no other. Kudos for that.

Live long,
 
Yes, great post, Todd. Thanks for the information, very educational. One does learn new things everyday...you really help to quench my diamond thirst, so to speak...well, not quite quench it yet but does help.
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Very interesting topic being discussed here and very informative. Thank you.
 
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