Diamond Prices: The Picture Tells The Story

03/11/2015 16:48

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Nicolas Colas, chief market strategist at Convergex, draws attention to Pricescope, a closely watched industry source of diamond price data, which has a useful graph of diamond prices for everything from sub-one carat to +4 carats. Colas believes this tells the story of diamond prices well. The price of smaller diamonds – 0 to 0.5 carats – is now as low as any point during the Financial Crisis and down 5-7% from December 2007. Diamonds from 0.5 carats to 4.0 carats are still up 10-25% from that date, but all were more expensive in mid-2011. Very large stones (+4.0 carats) are relatively stable at +30% from December 2007.

Colas draws a twofold conclusion: "First, diamond pricing in 2015 clearly shows the velocity of the economic slowdown in China but also that better conditions in the U.S. and India were not able to pick up the slack. Second, it seems clear that diamond prices are nowhere near bottoming. There is inventory through the supply chain, from suppliers of raw gems to retail stores. That’s why prices have come down so fast. And why it will take time to see them recover."