A stable gem market heralds happy holidays
The U.S. gem market is well-positioned heading into the holiday season. Improved demand for industry products is attributable to several factors: Prices are stabilizing in a number of gem categories, metals prices are lower, and retail consumers are able to access credit more easily than they could in 2012.
As a result, retail jewelers have been more willing to buy. Although business is much improved, manufacturers still are cautious when extending credit. Retailers should expect obtaining memo goods this season to be difficult again for all but the best accounts. But with economic conditions slightly better than last year, they can expect to see improving demand for midrange diamond and colored stone products.
In the diamond market, wholesale price decreases are being reported for round brilliant cuts. The trend is not broad in scope, however. The generally modest decreases are occurring mostly for melee up to 0.3 ct. t.w. in the D–F and VS2 or better ranges. Prices for larger rounds generally are stable. The price difference between rounds and fancy shapes remains considerable. This continues to attract more buyers to certain fancies; princess and cushion cuts are particularly popular.
The United States continues to be the dominant force in the diamond market. Dealers returning from the September Hong Kong show report that business was down noticeably compared with 2012. Although the Chinese market remains strong, buyers are rejecting many goods because of high prices and growth is slowing.
But slow growth is still growth. The Chinese market holds solid long-term potential for luxury jewelry. As the middle class grows, those consumers will increase their spending. Factor the improving U.S. economy into this situation and there is potential for prices for better goods to rise again in the not too distant future.