The New York Times is reporting that diamond sales are down, companies are cutting production, and the price of raw uncut diamonds is down 20%. And those prices are probably going to go down another 25%. Does this mean that the polished product that you see in the store will drop in price? Yes and no.
When I was shopping for my fiancee’s ring, I did what any smart shopper does and first scouted around for prices for several months. I did this not to only figure out how much money I needed to save but also to see where I would get the best price. Sure, I’m aware that each diamond is different and its better to see a diamond in person than to order one blindly online, but if an online order would save me 10% off the final price and allow me to return it if I was unhappy, an online price point would tilt me to take a risk. Blue Nile and Engagement Rings Direct were my two mainstays. However, I discovered that those two might not necessarily offer the best price.
Since diamonds are a commodity, their price is determined, to some extend, with the prices set on the open market. As the price dropped late last year (even Tiffany’s cut rates), the drop in diamond prices started to slowly appear in the market but those two online firms, and other independent jewelers, were not necessarily the cheapest price around. The Diamond District, where most polished/uncut stones start their travels in the United States, is where the price dropped the fastest since they were the first stop in the US market. In fact, the stones my fiancee and I were looking at here hundreds of dollars cheaper in the NYC diamond district compared to small independent jewelers in Florida, New York City, and online. And don’t get me started about the price difference with the big box chains such as Zale’s. Those incredibly inferior pieces of crap, which were already inflated in price, continued to stay inflated. Even a store closing, 90% off sale, can’t make up for the fact that you’re still wasting money at that point.
So, if you’re in the market for a diamond, now’s a good time to make a buy. The price will eventually go back up as the global recession recovers but it’s good to know that, right now, you’re getting the most bank for your buck. But, if you’re unemployed or have zero job security, buying a big diamond right now might not be the best thing.