In recent months we have seen strong price increases corresponding with increased demand returning to the US market, but heightened by the emerging Chinese and Indian market and roughly 2 billion people benefit from high economic growth and see the rise of strong middle classes in each country which will dwarf the US population. Additionally, the US dollar has lost a great deal of its buying power against these other currencies.
All of this accounts for a long term increase in diamond prices as the demand will outpace the supply by almost double by 2016, according to Martin Rapport’s calculations. Even if he is off by the projected demand curve, he isn’t off in his predictions of large and continued price increases reflective of US inflation (and weakening dollar) and emerging middle class Chinese and Indians with desires for some of the luxury products we have enjoyed in the West for so long, loose diamonds being but one. Of course, the difference is Sony can increase production of flat screen TV’s just as BMW can increase production of their autos to meet the increased demand. However, there are but so many diamonds in the mines we know are operating and it takes a good 8-10 years before a new mine can come on line.
These diamond price changes have created a cash market like none I have ever seen. The cash prices I saw from our overseas diamond cutters were actually higher than the prices being quoted domestically, which means we will see some increases very shortly as the distribution system catches up with the price hikes.
We are able to provide great prices for our Passion Fire diamonds because we are a cash dealer; we are able to pay cash and receive the very best price for the diamonds we sell. Even though prices will be going up, we can remain competitive as we provide the finest cut diamonds and diamond engagement rings in the world.
