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WIth Gold Down, Is the Price of Diamonds Next?

Gold has long since dropped from the historic highs of $1500 per ounce but does that mean that the price of diamonds will be next? With most drops in the price of precious metals, the price of other precious materials does tend to fluctuate a bit. The price of diamonds however, is a rather constant variable that only drops or rises very minimally with the down turn of other precious materials. That being said, the price of diamonds for those that want to sell diamonds depends on three or four variables that are specific to each stone and to each seller.

The first characteristic that affects price is clarity of the stone. If suddenly the world ran out of stones with high clarity, the price of foggier stones may rise a bit to compensate. Conversely, if the world suddenly ran out of cloudy stones the price of clear stones would likely drop to compensate. The clarity of the stone can make even the lowest carat weight stone cost hundreds. Another thing to consider when thinking about diamond cost is carat weight, the bigger the stone, the bigger the price. Now carat weight is a very real variable to consider. The world only has so many 30 carat stones and they are rapidly running out.

With massive diamonds like the Hope diamond being pared down to fit in ever smaller and more tasteful settings, it is a very real possibility that the price of larger stones could rise dramatically due to the lack of immensely large stones on the market. The demand for any one type of stone is what drives up and lowers the cost. If everyone in the world suddenly thought that large stones over say 2 carat weight were unfashionable and demand fell, the price would also fall. The last thing to consider is the stone itself and how many other stones in the world are like it. If there are twenty stones exactly like it then the price will drop. If it is the only stone of its kind, the price will rise. The price of diamonds will likely not be affected by the drop in the price of gold so long as the demand for diamonds remains intact and it seems as if that is the case.

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