Diamond Demand 💍
Buyers looking for some new ice were in for a sticker shock this week at the De Beers diamond auction — some prices had skyrocketed by 10% since the last sale. Word of the abnormally high price hikes circulated quickly among the De Beers circle of handpicked clients. But what happened next was shocking — within a few hours, some of those same diamonds were selling for a 10% premium, as purchasers having De Beers access sold diamonds to dealers and manufacturers who didn’t.
The soaring prices are the latest evidence of growing demand in the diamond market. The pandemic had brought the industry to a halt just nine months ago. Now, diamond enthusiasts are vying for stones like never before. When U.S. spending shifted away from service and travel to goods and luxury items during the pandemic, diamonds were a huge winner.
De Beers, one of the world’s largest diamond producers, has already sold 73% of its 2020 diamond sales this year. And according to Signet, the parent company of Kay Jewelers and Zales, e-commerce sales increased 125% in the most recent quarter compared to the same period last year, owing to virtual advisers and try-on capabilities.
Some diamond experts are concerned that the market is becoming too hot. Because it takes three months to cut, polish, and sell a diamond, stones purchased at a discount earlier in the year are now being sold for a significant profit. That also means that people who purchase polished stones at today’s prices are banking on their value increasing in the future.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.