What Caused the 2012 Diamond Price Drop?
The first half of 2012 has resulted in a drop in the price of diamonds that might seem surprising to those who believed that diamonds always retain value. While the steep drop in the price of diamonds occurred, it was not surprising to those who were watching the markets carefully. When you understand the reasons for the drop in price, it is easier to take advantage of this time to get great deals on diamond jewelry.
Reports in Diamond Price Trends
The diamond price drop in the first half of 2012 was 3.6 percent, which might not seem high until the previous years are factored into the current costs. According to Rapaport, the price of diamonds has declined a total of 13.7 percent in the last couple of years. The report about the downward trend suggests that diamonds are likely to continue falling in price throughout the next year.
Drop in Demand
The Rapaport report suggests that the drop in price is directly related to the demand for the precious stone. Economic factors around the world are resulting in a lower demand as fewer individuals are able to afford the stone.
The demand in India and the Far East has dropped dramatically as economic factors take precedence over the cost of diamonds. Fewer purchases in India have occurred due to the collapse of the Rupee. As fewer individuals are able to afford diamonds in India, the cost of diamonds is gradually diminishing.
Rapaport suggests that the United States has a different situation. Instead of a reduced demand for the stone, consumers are opting for more budget friendly purchases. The amount of sales are relatively similar to previous years, but more Americans are seeking deals and lower costs.
The reduction in diamond prices is causing changes in the jewelry industry. Despite the changes, it is possible for consumers to get excellent deals on better diamonds. Later this week, we’ll discuss why summer time is one of the best times of the year to buy a diamond – this price drop is part of that reason! Ultimately, the price is likely to increase as economic factors improve.
Helen J for Raymond Lee Jewelers, premiere fine jewelry and luxury watch boutique and buyer.