Big, Rare Wholesale Diamonds May Decline in Price
Prices of big, rare diamonds could ease due to the financial crisis, but may recover later as buyers worry about inflation and have few alternatives for investment, a leading diamond broker said on Friday.
Martin Rapaport, whose price list is used as a benchmark for the wholesale diamonds trade, also said the outlook was gloomy for middle-tier diamond jewellery demand over Christmas in the world’s top market, the United States.
“People hold goods off the market. There’s an issue with bigger stones not being liquid,” Rapaport told Reuters in a phone interview. “There is a softening of big stones. The buyers are hiding.”
The Rapaport Diamond Report, has yet to show any softening of prices for big, rare diamonds. It has shown prices of almost colourless “D”, high clarity VVS1 round diamonds weighing 10 carats holding steady in recent months at $170,600 per carat.
Rapaport said the huge concentration of wealth in oil-rich countries was likely to spur demand for large, rare diamonds.
Worries over inflation stemming in part from a $700-billion U.S. bailout plan for financial markets, could trigger buying of diamonds and gold, he added.
“I think the big stones are going to boom again because of inflation and a lack of alternative investments.”
The outlook for middle-value diamonds in jewellery — worth roughly $5,000 to $10,000 per carat — is poor this Christmas as disposable incomes in middle America are squeezed and the mood of consumers is glum, he said. The weak economy is weighing on everyone’s minds.
“The middle class luxury wallet has gone bye bye,” Rapaport said.
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