{"id":68,"date":"2007-09-24T16:45:37","date_gmt":"2007-09-24T07:45:37","guid":{"rendered":"https:\/\/www.diamondsandopals.com\/blog\/is-commoditisation-upon-us\/"},"modified":"2018-08-30T15:19:11","modified_gmt":"2018-08-30T07:19:11","slug":"is-commoditisation-upon-us","status":"publish","type":"post","link":"https:\/\/www.jogiadiamonds.com.au\/blog\/is-commoditisation-upon-us\/","title":{"rendered":"Is Commoditisation Upon Us?"},"content":{"rendered":"

In an attempt to further commoditise diamonds, diamond industry services group Rapaport<\/a> recently completed their first certified diamond auction.
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As this article in The Age<\/a> explains, this type of thing is nothing new – “In 1972, 194 diamond contracts were traded on the West Coast Commodities Exchange over a two week period before prices collapsed and the exchange ended diamond futures trading”.<\/p>\n

Of course, any event like this is bound to draw widespread criticism from the industry, but it does beg the question – have diamonds reached a point where they can be traded like gold or oil, or is every diamond unique and therefore must be sold in the traditional, individual way?<\/p>\n

Well, if you’re going to commoditise diamonds, then there obviously needs to be some sort of standardisation. A couple of weeks ago, we wrote about diamonds as an investment<\/a>. In this post, we mentioned that both the certificate and cut are important when considering a diamond as an investment. It therefore comes as no surprise that the Rapaport auction featured only GIA certified stones of either a “very good” or “excellent cut”. They also limited the clarity grade to VS2 and above, and the colour grade to K and above, with no fluorescence<\/a>, as well as only listing stones 1ct and above. Rapaport also guaranteed the grading of each stone, stating that buyers could re-submit the stone to the GIA, and if the grading was wrong, then the buyer could return the stone for a full refund.<\/p>\n

At the end of the auction, only about 30 of the 210 stones were sold, but looking at the high bids, I would say that most, if not all of the reserve prices were too high, and the highest bids were probably only 1 or 2 percent off the reserve. However, at the end of the day the auction showed that:<\/p>\n