December 20, 2009
By Jennifer Waters
Wall Street Journal
The holidays can be a romantic time and there will be plenty of guys popping the question along with the champagne corks in the next few weeks. And if you’ll need a diamond to go along with that proposal, now is the time to buy.
While prices vary widely based on the quality of the cut and the rarity of the stone, diamond costs in general remain about 10% below year-ago levels.
Those prices have started to creep up from their lows in March, though, and the relative bargains won’t last long as the effects of the recession wear off and an oversupply of polished gems diminishes, retail diamond sellers say.
“There is a fair amount of inventory still out there because of the weak demand and because of a general aversion to wearing bling during these economic times,” says Dione Kenyon, president of the Jewelers Board of Trade, an industry credit bureau.
But don’t be blinded by love when diamond shopping. The process can be intimidating because of the lofty prices involved and what to the untrained eye can appear to be minor distinctions between stones. Markups on retail sales can be anywhere from 50% to 100%, jewelers say.
“There is a fault line between rough prices and polished prices. Since January rough prices are up 60% while polished goods are down 8%. Expect a 70% major earthquake rise in prices over the next 12-15 months as the structural imbalance re-stabilized into the new reality.” –Fred Cuellar