Gems Vs Metals

I'm not in the gem business but I have friends who are and they are paying rock bottom prices for diamonds right now. With everyone cashing in jewelry for the gold content and fewer people buying jewelry due to the high price of gold the jewelers are finding themselves with more gemstones than they can sell.

Richard

Gemstones are tougher than metals if you are looking for an investment. I deal in gemstones (mainly diamonds) all day long, and am also GIA certified. Basically smaller stones (stuff under 1 carat) are available on the secondary market for a mere fraction of the price they were a few years ago. As ziggy9 mentioned many of them are coming from scrapped jewelry. But the main reason the value is dropping is DeBeers not holding nearly as much of a monopoly on the market as they used to. Mines in Australia, Canada, and Russia are releasing diamond rough at never before seen rates, and in the process are lowering the value. Larger stones (1 carat and above) are holding their value pretty well.

Always remember the value of a precious stone is based on 1 thing... rarity. Rarity is determined by 4 things in diamonds, cut; color; clarity; and carat weight. If you have a high quality diamond it's value will probably grow over the years, but it's original cost will be very high also. Don't expect to make a good investment on low quality diamonds because there are always more entering the market. I've got about 15 carats of melee junk if you want them cheap =)

So to answer your question. In economic downturns, smaller diamonds and lower end diamonds lose value. Higher end gemstones lose value but at a fraction of the percentage.

One thing I like about metals is that they still haven't figured out how to synthesize metals.

I buy second hand jewelry all the time, but only based on metal content.

I am a hobby gem cutter (see my user profile) and not in the commercial business of gem trading, although I know a little. The comments before mine are all good.

I love cutting Australian yellow sapphire, mainly from the Anakie region of central Queensland, which is probably the biggest sapphire source in the world.

One problem with gems is that you cannot get the current spot price off the Internet. Each gem has to be examined and valued. With diamonds, you can get a grading certificate and have it encapsulated, something like a coin slab. Diamonds can even be laser marked, usually on the girdle, but I'll bet you that even laser marking has been forged. Trading in precious metals would be more liquid.

Thanks guys, you pretty much confirmed what I was thinking. But clarified what my mind couldnt quite grasp. That purity and the scale never lies

dzrick: If you want to sell gemstones, or hobby / craft jewelry or whatever, Google 'gemshows'. The biggest in the world is in Tuscon, and man, that is HUGE! There may be one in the coming year that would be closer to your locality.

At such a show you can find contacts who could advise how to dispose of a valuable gem collection. There a number of good gem magazines, with classifieds at the end pages. Buy a gem magazine and locate dealers that may be of interest to you, and look up their websites.

I am sure that someone else on the CCF will chime in about the annual Tucson gem show!

And all of this is is from a a native of Oz!

Not to far from reality you know. Diamonds being made now is real common and if allowed, some countries could really flood the market. Not sure but I suspect almost any rare or precious type stone could and soon will be produced if there is a market for them.
Picture a Ruby the size of a car.