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Tuesday, August 18, 2009

Diamond Market Report

Everyone is seeking low price points because consumers have lowered their expectations and are happy to buy the look at a reduced price. But, in the quest for cheap goods, there have been reported cases of buyers being duped by diamonds sold with counterfeit certificates. These are usually High Pressure-High Temperature (HPHT) diamonds, cut to the same dimensions as genuine diamonds certified by world-recognized gemological laboratories, but then sold with counterfeit certificates nearly identical to real certificates. Even in checking online with the certifying laboratories' web pages, the diamonds match the description exactly. Only when the buyers become suspicious and send these diamonds to the laboratories for actual verification is the fraud discovered. Very crude attempts also are being made to sell diamonds that do not match their certificates in quality or color. This happened during the June Hong Kong show. Except for the few sharp buyers who were put on alert by the price discripancies there were many who thought they had concluded the deal of their lives by buying at way below market prices and who then passed on their mistakes to unsuspecting clients down the pipeline. It is normally a dead giveaway when you can buy diamonds much cheaper from one company while other sellers are pricing goods plus or minus a few percent from market prices. But in the past few months, due to the unprecedented pressure manufacturers and dealers were getting from their bankers, big price differences became the norm and diamonds were, in some cases, sold at giveaway prices. This lowered the guard of buyers. The recent misleading and counterfeit instances have reminded dealers of the importance of knowing the source of the diamonds they are buying so they can assure their clients that they come from bona fide sources and are the same diamonds described in the accompanying certificates.

- Gaston D'Aquino
Rapaport Diamond Report, Vol. 32, No. 8, August 2009
www.diamonds.net

P.T. Barnum said it best, 'There's a sucker born every second'. Buyer beware.

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