Boy, that economic recovery is going great, isn't it? That's what the stock market and all of the financial pundits keep telling us. Party on, Garth. It's 2004 again.
Unless you're a seller of diamonds, that is. Here is Yahoo News with the details:
Experts say a growing cadre of people, especially in North America, are thinking along the same lines. Rather than hanging on to memories of a failed relationship or departed relative, they are opting to "recycle" their diamonds.I guess the takeaway here is that if you are looking for a hard asset in which to try to protect your wealth, diamonds might not be the best choice.
"You have no money to pay your medical insurance, you have no money for your mortgage," said Chaim Even-Zohar, a consultant with Israel's Tacy Ltd. "So you take your jewelry and your diamonds to the pawn shop."
It's a trend that is sending ripples through the gem industry at a time when high-quality rough diamonds have become more difficult to find, and more expensive to mine.
The growing influx of "used" gems means prices could stagnate over the long term despite the supply restraints, Even-Zohar said during a presentation at PDAC, the huge mining industry convention held last week in Toronto.
To be sure, analysts were already expected a short-term dip in prices as a weak global economy cuts disposable income in Europe and North America. But the forecast by Even-Zohar, a respected expert, seemed to confirm a nagging fear that recycling could hurt explorers and miners for years.
The numbers already point in that direction, he says. The rough diamond market, before the stones are polished and cut, was worth about $15.2 billion in 2011, and could drop some 10 to 13 percent in 2012. At the same time, Even-Zohar expects $1 billion worth of recycled diamonds to be put back into the market this year.
Bonus: Lots of great diamond songs out there, but I've always really liked this one