Current trade activity indicates the prospects of a significant price correction in the global gem market have increased sharply. Dealers returning from the HKTDC Hong Kong International Jewellery Show in February report a surprising lack of large, fine colored stones in the market. However, they note that the fine stones on offer encountered strong resistance at current price levels. With the economy growing at a modest rate in the United States and slowing in China, consumer demand in these markets is restrained and, as such, is setting the stage for a pullback.
The anticipated price corrections are limited to those gem materials that realized the strongest increases during the past few years. Chief among these are ruby, sapphire, diamond, and tourmaline. There remain, however, numerous gem varieties that are advantageously priced considering the current economic conditions because their supply was sufficient to insulate them from volatile price movements. These include agate, certain beryl varieties, garnet, opal, several spinel varieties, peridot, and zircon.
The JCK Las Vegas show offers a major opportunity to judge the strength of the market as the industry transitions into midyear. Two-tone metal as well as silver and fine colored stone designs are expected to be areas of interest, with retailers seeking captivating styles at affordable prices.