Saturday, April 5, 2008

Diamonds are Dearer

While we are watching commodity prices rise across the board, oil, corn, wheat. The same price increases have been seen in diamonds. Just look at what's happened to diamond prices since 2007.

As always the question is why?

From Idex online:

There appear to be five key factors that are driving diamond prices sharply higher: 1) solid demand from most markets, except the U.S. and Japan; 2) rising costs throughout the diamond pipeline; 3) a weakening U.S. dollar, the international currency for the diamond market; 4) a global rise in the price of virtually all commodities which has spilled over into the diamond market; and 5) stock market volatility, the last of which has caused some traders to move their wealth into diamonds, precious metals, and other assets that may hold their value, until the financial markets recover.

The big question is this: will these diamond price increases hold at retail, or will merchants negotiate them down?

I think the real question is can merchants negotiate the prices down?
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