Just don’t count on prices being stable for long

The gem business in the United States is thriving. Demand grew in April, and the momentum behind sales carried into early May. Dealers are optimistic heading into the JCK Las Vegas show—a critical midyear predictor of retail jewelry purchasing strength. Currently, the U.S., like key markets overseas, is seeing good demand for well-made round brilliant diamonds in the collection colors. According to dealers, 0.75-, 1-, and 1.50-ct. sizes are particularly popular while shortages in 2 ct.–plus sizes continue due to pressure from buyers in the Far East.

The colored stone trade is also growing on the back of demand for fine-quality blue sapphires, much of which can be attributed to the hoopla surrounding the royal engagement ring worn by Kate Middleton. Demand for fine red tourmaline is strong, and red spinel is gaining market share in response to very high ruby prices.

Many of the classic gems are expected to sell well at the show. The softer dollar is inviting to European buyers, but dealers are very particular: They’re coveting fine and extra-fine qualities, while demand for the commercial grades remains weak. Prices in general are stable—but likely to rise—as the market witnesses across-the-board improvements. These developments do not, however, necessarily bode well for retailers, who face the challenge of passing on higher prices to clients encountering sticker shock upon their return to the jewelry market.