Why are Diamond prices going up? Part 2
People keep asking me – Fred, why are diamond prices going up so much? I hope this helps us all understand a little better.
#2 The supply of diamonds is limited. There has not been a new major diamond mine found in 20 years. Also a a number of diamond mines have closed in the last few years. Banks are less interested in loaning the money that mines need to keep operations going. So with more people in China and India with more money, an increase in demand, and a stronger currency, the price of diamonds goes up.
A retail jeweler in America needs to sell a 1ct G SI1 for the same price as a jeweler in China is selling a 1ct G SI1. It does not matter how weak the US economy is. The US economy does not determine diamond prices. We in American need to sell diamonds at Chinese prices. MONEY decides who gets the diamonds. The diamonds are not coming to the US. They are going to China.
China and India’s economies are growing. In Sunday’s New York Times business section. Mr. Graff talks about the number of billionaires in China climbs annually. China will soon have more millionaires than America. 48% of the Indian population is under the age of 25. They are hungry to work. Their GDP increased 8.3% this year. They want to make money and buy nice things. We in America are going to have to share.
