Are Diamond Dealers the Newest Buyers of Colored Gemstones?

By Jennifer Heebner, Editor in Chief

In 2023, 100% of Rahmanim’s Imports’ inventory was Diamonds—loose and finished goods. In 2024, that number dropped to 80%, with the remaining 20% replaced by colored gemstones. Why? Fluctuating Diamond prices have caused six-figure losses for the Chicago-based company founded in 1980. Between changes to prices on the Rapaport list and in the synthetic Diamond market, it’s become a risky proposition to sell Diamonds.

“We are cautiously buying Diamonds now,” says Neda Rahmanim, who runs the company with her brother and parents, the latter who sold color exclusively when they started the firm. “We bought a huge package recently, and the value dropped 7% because of a change in Rap list prices. When Diamond prices change, we must be competitive and bring ours down. The colored stone people are thriving and their markup is crazy.”

The Rahmanims are far from the only Diamond dealers buying colored stones, a move that high-end gemstone dealers have been watching transpire over the past year. It’s a market change that is complicating an already competitive gemstone market, where prices of top-end goods just seem to keep climbing.

At the 2023 fall edition of GemGèneve in Geneva, Jeremy Hakimi of Colorline, Inc., told AGTA that he was getting calls from Diamond dealers for color, an anomaly for his business, which typically sells to brands and other makers of jewelry.

“Dealers are trying different things to make a profit because the margins in Diamonds are so tough.”

Market Competition

Gemstone dealers already have plenty of competition amongst themselves for the rarest stones. Think unheated goods like Sapphires and Paraíba Tourmaline, among others. These gems are in demand not just in the U.S. but also in Asia and Europe by brands. Availability of goods from source countries isn’t great, leading many to look to the secondhand market for good buys. “There’s already not enough rough, which adds to demand,” observes Sam Sulimanov of Samuel Sylvio Designs, a seller of Paraíba.

Few can blame diamantaires for wanting a piece of the colored stone pie. Diamond prices rise and fall with regularity, so dealers may sit on a stone until the price/time is right to move it. But in color, you can see the trends over time.

“Prices never go down,” adds Sulimanov. “Color offers some security for Diamond dealers.”

It’s the rarity of fine color that’s key. Supply is limited compared to demand. In Diamonds, you can find a few 10 ct. D flawless stones, but 10 ct. no-heat Sapphires aren’t so abundant.

Bayco Gem Corporation’s Marco Hadjibay understands the appeal of color from his friends selling Diamonds; their money is safer. “We have been saying that color is the rarest segment of the industry,” he says. “It’s a point that retailers and consumers are starting to understand.”

Intercolor USA’s Afshin Hackman struggles daily with the shrinking supply and increased demand of fine color. He knows more silent partners of Diamond dealers are buying rough at Gemfields’ Ruby and Emerald auctions.

“With prices dropping continuously on Diamonds and hearing that Ruby and Sapphire prices keep going up, others want to jump on the bandwagon,” he confirms. Meanwhile, the woes of Diamond dealers keep mounting. “Last week, a Diamond dealer friend of mine told me that in the past year, his Diamond inventory dropped 40% in value.

Caution for Color

New and returning colored stone buyers in the trade should be mindful of the nuances of the material. It’s not as easy to buy colored stones as it is to buy Diamonds. Diamonds have a grading system to identify the different qualities and a price list from Rap that regulates how much folks pay. Colored gemstones have none of that. Some in industry reference the price list in The GemGuide, but not all. “And there’s not a lab in the world that will grade clarity on a colored stone,” adds Hackman.

“You need a lot of expertise to buy color correctly,” confirms Hadjibay.

Misfit Diamonds, USA, has been selling Sapphires since 2021, but it wasn’t Diamond prices that drove them to; they were anticipating demand for their niche product—salt and pepper Diamonds and unheard-of fancy cuts like shields—being copied by competitors, causing a disruption in the supply chain. “We had no idea how prophetic our move was,” exclaims Ashkan Asgari, founder.

There are also misconceptions. “People think that gemstone buyers purchase a stone for $10 and sell it for $100,” muses Hackman.

Obviously, that’s an exaggerated viewpoint, but there’s a nugget of truth there. Ten years ago, a jewelry manufacturer friend of Hackman’s wanted to spend $5 million on Ruby rough at an auction, just to put the material in his safe for later sale. He was outbid on every offer. Had he won, speculates Hackman, who deals in fine Ruby sales daily, that would been a good bet. “His $5 million would have turned into $12 million,” says Hackman.

This sort of thinking is why Swissdiam New York LLC, a seasoned dealer in fine fancy colored Diamonds, just joined AGTA; the firm is diversifying into color. “We see a lot of opportunity in fine Rubies, Emeralds, and Sapphires,” explains Tarek Nsouli, based in its New York City office.

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