IMPACT OF GOLD AND DIAMOND PRICE INCREASES ON SCHEDULED JEWELRY ITEMS
The lingering U.S. recession has not held down gold and diamond
price increases. Three main reasons for this are:
1. Worldwide, interconnected economy
2. Demand in the emerging markets of China, India, Russia and Latin
3. Gold as a haven during times of international political unrest and
potential for war in the Mideast
During 2011 the following has caused the retail price for mass-manufactured jewelry to
increase between roughly 60 – 80%.
1. Spot gold price is up 20%
2. Diamonds have increased 20 – 25%
3. Labor costs to cut diamonds in India (now the major diamond cutter country) have
increased 15 – 20%
4. A 20% labor cost increase in precious metals fabrication
The solid gold bracelet (that is 14- or 18- karat) Jane Doe bought in January 2011 for $2,500
will cost between $4,000 – $5,000 to replace now!
Solid gold jewelry with diamonds have increased in price as much,
or more, depending on the size and quality of the diamonds. Melee
(the term used for small diamonds under 0.15 carat) have increased
about 20% during 2011. Larger diamonds of high quality, over 2
carats for example, are up over 60%!
What Does This Mean For You?
Most jewelry schedules are probably under-insured. A rebounding
worldwide economy will mean no long-term price reductions in
diamonds. World unrest will likely mean no decrease in gold prices.
Unless the item was recently appraised and values updated, the
insured amount may not have kept up with the increased value of gold
and diamonds. Check those Insureds with scheduled jewelry and
alert them of potential discrepancies of insured valued and the
increased prices of gold and diamonds.
Please note your exclusive Allied Insurance toll-free number to reach RPAA.
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