Our office is in a wholesale diamond building on Fifth Avenue. Lately, we’ve noticed a drastic turn in the retail market “downstairs” on 47th Street.
The hawkers on the street no longer say “buy from us.” They now say “we buy gold and diamonds.”
The price of gold and platinum has increased so much that consumers are starting to sell their jewelry, as they feel they can get a good deal from the price differential.
We recently bought back a diamond we sold to a consumer. The price had increased so much, the person made a tiny profit.
On the other hand, the rising price of metals, combined with the bad economy, has made it hard for the industry.
We are definitely seeing heated gains in the price of big stones. Cutters are beginning to use the same sentences they did in 1980: “When I sell, I cannot buy back.” It is not a healthy situation. We don’t believe that sitting on inventory, and speculation on goods, is helping anyone in the long run.
As far as the market, our own expectations are that this year will be a good year for the mid– to lower-end of the market, at least in the American market that we mostly sell to.
In the world markets, the very big and the very fine stones (flawless, VVS) are hot. But in the United States, it’s the opposite. People are asking for lower qualities.
Today, even people who ask for two, three caraters will settle for something that is eye-clean. A “D” VS1 three carater costs close to $100,000. Even the so-called wealthy people are no longer willing to spend that kind of money. It used to be said that even in a recession, the wealthy will have money. With all the problems on Wall Street, this recession may be hurting the wealthy too.