Are Diamond Cartels Losing Their Vice Grip on the Industry?
Is a diamond really a girl’s best friend? Well, that’s definitely a matter for debate, especially in an era where most females of marriageable age prefer to be called women. We can tell you one thing for sure. Diamond cartels are nobody’s best friend. As if we didn’t have enough reasons to loathe this monument to capitalism at its most base level (and by “base” I definitely mean “crass”), we are now seeing more evidence that diamond cartels have artificially inflated price of these not-so-rare-after-all gems.
CNBC recently reported that, in fact, the market is seeing a downward trend in the price of diamonds over the past few years. The marketplace is changing rapidly, and the effect is a much lower price for diamonds, the world over. In fact, Martin Rapaport, Chairman of Rapaport Group, calls the diamond industry a “volatile trade.” Diamonds, it seems, are hardly an investor’s best friend these days. Further, financial analysts are beginning to speculate that diamond industry trends may be signs of pervasive deflation from a macroeconomic perspective.
Between April 2014 and April 2015, diamond prices have dropped by 15 percent. De Beers, infamously known for spearheading an ad campaign in the 1940’s that made the diamonds an iconic, must-have stone for engagements and weddings, has made it more difficult to finance their purchase. The effect is that fewer people can afford diamonds at their previous inflationary rate. Demand is decreasing, and along with it, diamond prices.
Another factor contributing to the decline of the diamond as the darling of the jewelry industry is a glut that has been created by major fluctuations in Asian markets. A rise of the middle class in countries like China and India led to higher demand in those parts of the world. Retailers responded by stocking diamonds based on projected growth that never came to fruition. After the initial rush of popularity, the market slowed down, and the industry was stuck with a surplus which has driven diamond prices down on a global scale.
An industry financing leader, the Antwerp Diamond Bank, stopped taking on new clients within the last year. It has become too risky to support new diamond manufacturers and craftsmen for new inventory production.
The deflationary trend of diamonds suggests that perhaps this notoriously overpriced stone may soon reach unprecedented low prices that more closely resemble a fair market value. Can you imagine purchasing a full carat diamond for under $1000.00? Dare we say $100? Some observers, including CubicZirconia.com Vice President, Danny Welsh, think that diamonds might one day fall to a much more accessible price for jewelry enthusiasts, especially young couples who are getting engaged. He says:
Consumers are starting to realize that diamond rarity an inflated lie. Eventually, in say, fifty to one hundred years, if trends continue, lab-created diamonds and diamond simulants like cubic zirconia may no longer fill a market need. Customers will be able to buy real diamonds for a hundred dollars or less. This is a more realistic price, even now, given that diamond cartel companies have manipulated the market and kept millions of diamonds in warehouses. Until then, CubicZirconia.com is here, ready to serve you with the highest quality, 5A, man-made diamond alternatives sold at an affordable price-- stones set in high-quality jewelry that no one, not even jewelers with decades of experience, can definitively say with the unaided eye are not diamonds.
Guaranteed to put a little more sparkle in your life, CubicZirconia.com stays on top of market trends and understands their impact on your shopping experience, and your wallet. We are delighted to make your jewelry dreams come true. And hey, if that means you can save for a house, go on a honeymoon or bank the leftover cash, so much the better.
- Tekla Luchenski, Staff Writer
- Tekla Luchenski