Color-change gems lead the pack of stones seeing spikes in demand (and pricing)

Sales in the U.S. gem trade are stable. However, consumers are facing increasing pressure on their discretionary spending as rising gas prices threaten to slow sales of non-essential items. To mitigate this trend, retail jewelers can take advantage of an array of colored stones that still offer strong value at attractive price points.

Phenomenal gems—color-change sapphires, garnets, and alexandrite—are experiencing solid demand. As a result, prices in this category have increased sharply.

Color substitution continues to enhance consumer awareness of gemstones beyond the traditional birthstones. Rising demand and declining production have triggered price increases of 30 percent to 50 percent or more in some tourmaline categories. Even so, red tourmaline is still significantly more affordable than ruby. Likewise, prices of fancy color sapphires are stabilizing after strong increases in 2011. In sapphire, the natural yellow material is particularly attractive from a price standpoint. Other gem varieties that are well positioned in the current market—from the aesthetic and value standpoint—include spinel (an increasing favorite among fine gem collectors), aquamarine, peridot, spessartite garnet, zircon, and Ethiopian opal.

In diamonds, price drops in certain popular size categories continue. However, with last month’s average 1 percent to 2 percent declines, the dips are quite modest considering the increases in the market over the past five years. Even accounting for growth in Asia, a significant price correction is not out of the question for late 2012.