Wednesday 3 November 2010

Value of Diamonds

The value of the Emperor's diamond, like that of most other diamonds, depends heavily on the perception of the buyer. If it is accepted as a unique gem and a crown jewel, it could be auctioned off for a million dollars. If, on the other hand, it is seen as a piece of industrial boart, it will be sold for $140 and used as grinding powder. It is, as Jolis observed, "a two-tier market."

http://www.edwardjayepstein.com/diamond/chap20.htm

Most jewelers would prefer not make a customer an offer that not only might be deemed insulting but would also undercut the widely-held notion that diamonds hold their value.

"We usually can't pay more than 60 percent of the current wholesale price," Jack Braud, the president of Empire Diamonds, explained. "In most cases, we have to pay less since the setting has to be discarded and we have to leave a margin for error in our evaluation [especially if the diamond is mounted in a setting]." Empire removes the diamonds from their settings, which are sold as scrap, and resells them to wholesalers. Because of the steep markup on diamonds between the wholesale and retail levels, individuals who buy retail and, ;n effect, sell wholesale often suffer enormous losses on the transaction. For example, Braud estimated that a half-carat diamond ring that might cost $2,000 at a retail jewelry store could only be sold for $600 at Empire.

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