Taking a walk down West 47th street between 5th and 6th avenue is a "must-do" for anyone who lives in NYC or is visiting. The Jewelry District is a place to behold. It’s unique.
We have a jeweler that we have used, and turned many friends on to, on West 47th street. Going up to her office is a trip. You need to be let through 2 doors to get in. Security is high everywhere because god knows how many millions of dollars of gems are lying around. Big vaults, etc. She has taken me on back room adventures into some buildings on 47th street to get things fixed. It is a trip not only meeting the people but seeing the small confined spaces they work in and the jewelry crafts that they have mastered.
I was there today to fix something that broke. She showed me some 7 carat, flawless diamonds for some customers. They were absolutely spectacular. To see a diamond solo is a treat. I asked her how business was. She said the diamond market is going through an interesting surge in pricing.
For the past 100 years, diamonds have risen in cost about 2-3% a year. This year, diamonds have gone up 12-14%, and roughly 25% over the past 3 years. Low end diamonds are readily available and have not risen really in price but the high end diamonds have. Large companies, like Tiffany, have been buying up the market. She is having trouble finding high end flawless diamonds for customers. She can’t even get a 2 carat, high end diamond for $15K anymore. Why?
The world is changing. China has woken up. As democracies have been created in pockets around the world, the classes have changed. There is a strong middle class in China that wasn’t there 10 years ago. There is also a very high market is places like Korea that wasn’t there either. So, the demand for flawless high end diamonds have risen in Asia and other countries around the world which has taken away from the supply for the United States. Companies like Tiffany are going in to the market and buying as many high end diamonds as they can find and holding them as the market rises which makes access harder for smaller jewelers.
As the dollar sinks and our economies become more in line with other countries around the world, it will be interesting to watch the prices of consumer goods, particularly high end consumer goods. Supply vs. demand is basis economics of prices going up but what will happen in the art world or the antique/modern furniture world? There is a limited supply. As consumers in other countries gain the ability to live and consume like Americans, what happens to the value of goods. Diamonds have risen in price. What else is rising from the merging of economies?
We are entering a new world. It will an interesting time to watch as other products are affected by the change in the new world economy.