Supply and Demand: Gemstone Market Dynamics
The gem market can be very subjective. Nevertheless, investors can make money by starting with the basics: understanding supply and demand in the gem world.
3 Minute Read
Subjectivity and Gemstone Pricing
Gemstones require unique market-making skills. No picture or video can completely capture the beauty of a gem. A prudent purchaser must always see a gem in person, hold it in hand, and examine it under different lighting conditions.
All of the information obtained in that examination is critical to pricing. Yet, several knowledgable players examining the same gem will almost certainly come up with very different values.
As a result, developing systems and rules for gemstone pricing is quite difficult. So many of the dynamics at play are subjective and interpersonal. For example, here at IGS, we’ve taken our best stab at our own gem price guide. However, our tool is still only a “guide” because of these dynamics. In order to sell gems, you need to be both very knowledgeable and very proactive. You can’t simply quote well-established prices to your customers.
Gemstone Market Inefficiency
Since the gem trade sees relatively little regulation, the gemstone market is often inefficient. This means that prices for the same or similar gemstones will vary widely. You’ll see this particularly in the upper-middle and higher-end tiers of the market
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