The big story this fall remains the impact of inflation across sectors of the global economy. The ripple effect has been a substantial selloff in the U.S. Stock Market, among others evaporating substantial wealth. Given the higher costs of energy and daily household necessities, not surprisingly, the appetite of retail consumers to buy nonessentials has been moderating since early summer. Only recently has this become more ap- parent in the gemstone trade. Even at the beginning of September, dealers were still maintaining a positive outlook for the holiday season. However, by mid-October, subscribers were reporting an appreciable weakening in demand across most industry products. This is resulting in modest price de- creases for some categories. But in general, colored stone prices remain stable for the finer end. So, what does this mean for the holiday shopping season? And what can dealers and retailers expect in the new year? I remain fairly optimistic that the current cycle is not going to cut as deep into the gem and jewelry trade as it is other luxury and discretionary product sectors. Gems and jewelry have historically also served as vehicles for wealth preservation during periods of economic uncertainty. Likewise, they serve a symbolic role in human relationships not filled by other products. So, will business be more muted this holiday season? Absolutely. But will the season be a total bust? Absolutely not. FIGURE 1. Interest in well-made heart shapes as in this 6.38 ct Burmese spinel are one of the pleasant surprises of the post-COVID market. THE CURRENT STATE OF THE COLORED STONE MARKET Supply shortages remain a concern in certain key categories of fine color. Dealers report that fine quality sapphire, tourmaline, and opal are just some of the areas where sourcing is challenging. Then there is the matter of price. As one dealer commented at the Denver show, “Calls come for fine Paraìba tourmaline, but when I quote the price, there is shock. The situation is the same for fine padparadscha sapphire. Larger, fine quality pads, are very scarce. The current prices reflect this.” In general, the tight supply of gems has so far insulated prices with a few exceptions where we have noted modest declines. As Roland Schluessel of Pillar & Stones told us, “Prices are unlikely to go down much, at least not for fine quality material. There isn’t enough availability, which is keeping prices stable.” Roland does note however, that this is not to suggest that the market hasn’t slowed—it has. “The first sign of a rapid slow- down [in the market] is that ‘slow pays’ increase quickly, and this has been happening now for several months.” Several dealers interviewed also stated that they are being more cautious about extending memo this season than they were a year ago for exactly this reason. This is not surprising. It follows a pattern we have noted during past market slowdowns. Although there is consensus that in general prices have sup- port, dealers are expressing some concern that current price levels are driving sales to immediate needs only. As one dealer I spoke recently explained, “Prices increased wildly during the pandemic. For some material, current price points are discouraging buying for stock. I can’t just consider what you’ll pay for a stone. You have to also consider what your clients can afford. Current prices for too many gem varieties— including better sapphires, even heated ones—are pricing some buyers out of the market. So, yes, right now prices are holding but I am not convinced the trade can support this [price] structure long term, especially not in an environment...
The big story this fall remains the impact of inflation across sectors of the global economy. The ripple effect has been a substantial selloff in the U.S. Stock Market, among others evaporating substantial wealth. Given the higher costs of energy and daily household necessities, not surprisingly, the appetite of retail consumers to buy nonessentials has been moderating since early summer. Only recently has this become more ap- parent in the gemstone trade. Even at the beginning of September, dealers were still maintaining a positive outlook for the holiday season. However, by mid-October, subscribers were reporting an appreciable weakening in demand across most industry products. This is resulting in modest price de- creases for some categories. But in general, colored stone prices remain stable for the finer end. So, what does this mean for the holiday shopping season? And what can dealers and retailers expect in the new year? I remain fairly optimistic that the current cycle is not going to cut as deep into the gem and jewelry trade as it is other luxury and discretionary product sectors. Gems and jewelry have historically also served as vehicles for wealth preservation during periods of economic uncertainty. Likewise, they serve a symbolic role in human relationships not filled by other products. So, will business be more muted this holiday season? Absolutely. But will the season be a total bust? Absolutely not. FIGURE 1. Interest in well-made heart shapes as in this 6.38 ct Burmese spinel are one of the pleasant surprises of the post-COVID market. THE CURRENT STATE OF THE COLORED STONE MARKET Supply shortages remain a concern in certain key categories of fine color. Dealers report that fine quality sapphire, tourmaline, and opal are just some of the areas where sourcing is challenging. Then there is the matter of price. As one dealer commented at the Denver show, “Calls come for fine Paraìba tourmaline, but when I quote the price, there is shock. The situation is the same for fine padparadscha sapphire. Larger, fine quality pads, are very scarce. The current prices reflect this.” In general, the tight supply of gems has so far insulated prices with a few exceptions where we have noted modest declines. As Roland Schluessel of Pillar & Stones told us, “Prices are unlikely to go down much, at least not for fine quality material. There isn’t enough availability, which is keeping prices stable.” Roland does note however, that this is not to suggest that the market hasn’t slowed—it has. “The first sign of a rapid slow- down [in the market] is that ‘slow pays’ increase quickly, and this has been happening now for several months.” Several dealers interviewed also stated that they are being more cautious about extending memo this season than they were a year ago for exactly this reason. This is not surprising. It follows a pattern we have noted during past market slowdowns. Although there is consensus that in general prices have sup- port, dealers are expressing some concern that current price levels are driving sales to immediate needs only. As one dealer I spoke recently explained, “Prices increased wildly during the pandemic. For some material, current price points are discouraging buying for stock. I can’t just consider what you’ll pay for a stone. You have to also consider what your clients can afford. Current prices for too many gem varieties— including better sapphires, even heated ones—are pricing some buyers out of the market. So, yes, right now prices are holding but I am not convinced the trade can support this [price] structure long term, especially not in an environment...

Colored Stone Market – November/December 2022

Posted on November 1, 2022 by Stuart M. Robertson, GIA GG

The big story this fall remains the impact of inflation across sectors of the global economy. The ripple effect has been a substantial selloff in the U.S. Stock Market, among others evaporating substantial wealth. Given the higher costs of energy and daily household necessities, not surprisingly, the appetite of retail consumers to buy nonessentials has been moderating since early summer. Only recently has this become more ap- parent in the gemstone trade. Even at the beginning of September, dealers were still maintaining a positive outlook for the holiday season. However, by mid-October, subscribers were reporting an appreciable weakening in demand across most industry products. This is resulting in modest price de- creases for some categories. But in general, colored stone prices remain stable for the finer end. So, what does this mean for the holiday shopping season? And what can dealers and retailers expect in the new year? I remain fairly optimistic that the current cycle is not going to cut as deep into the gem and jewelry trade as it is other luxury and discretionary product sectors. Gems and jewelry have historically also served as vehicles for wealth preservation during periods of economic uncertainty. Likewise, they serve a symbolic role in human relationships not filled by other products. So, will business be more muted this holiday season? Absolutely. But will the season be a total bust? Absolutely not. FIGURE 1. Interest in well-made heart shapes as in this 6.38 ct Burmese spinel are one of the pleasant surprises of the post-COVID market. THE CURRENT STATE OF THE COLORED STONE MARKET Supply shortages remain a concern in certain key categories of fine color. Dealers report that fine quality sapphire, tourmaline, and opal are just some of the areas where sourcing is challenging. Then there is the matter of price. As one dealer commented at the Denver show, “Calls come for fine Paraìba tourmaline, but when I quote the price, there is shock. The situation is the same for fine padparadscha sapphire. Larger, fine quality pads, are very scarce. The current prices reflect this.” In general, the tight supply of gems has so far insulated prices with a few exceptions where we have noted modest declines. As Roland Schluessel of Pillar & Stones told us, “Prices are unlikely to go down much, at least not for fine quality material. There isn’t enough availability, which is keeping prices stable.” Roland does note however, that this is not to suggest that the market hasn’t slowed—it has. “The first sign of a rapid slow- down [in the market] is that ‘slow pays’ increase quickly, and this has been happening now for several months.” Several dealers interviewed also stated that they are being more cautious about extending memo this season than they were a year ago for exactly this reason. This is not surprising. It follows a pattern we have noted during past market slowdowns. Although there is consensus that in general prices have sup- port, dealers are expressing some concern that current price levels are driving sales to immediate needs only. As one dealer I spoke recently explained, “Prices increased wildly during the pandemic. For some material, current price points are discouraging buying for stock. I can’t just consider what you’ll pay for a stone. You have to also consider what your clients can afford. Current prices for too many gem varieties— including better sapphires, even heated ones—are pricing some buyers out of the market. So, yes, right now prices are holding but I am not convinced the trade can support this [price] structure long term, especially not in an environment...

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