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Gemstone rarity and price

Jewelry Discussion
#1 
Rarity IS the supply part of the supply  and demand equation.

Dear Dale,

I appreciate your view, and I used to share it. However I came to
realize that rarity means nothing if few buyers want it. The flip
side of this is: very common items, in high demand often sell for
very high prices. In the second case the material is not rare, and
the demand is very strong.

Two cases in point:

Taaffeite - a very rare, hard, beautiful gem that very few know of,
or care about. It should sell for a “million bucks” a carat based on
rarity.

Pyrite and Amethyst - in the mineral world these are very common
minerals. Beautiful specimens of these, no matter how many come onto
the market, go for high prices and always sell-out.

Regards, Steve

#2

Just a point - diamonds are anything but rare!

Tony Konrath
Key West Florida 33040

#3

Hello Steve,

Actually Taaffeite isn’t all that rare, for about $2 - 3,000 per
carat you can get lots of respectable stones as big as a couple of
carats quite easily. I think the colour change variety is better
qualified as rare, I certainly have never seen any. This stuff is
not particularly attractive which certainly aids it’s ‘rarity’ as a
gem. I haven’t sold anything bigger than a 62 pointer. Want to buy
some?

I have a really pretty blue jeremejevite crystal that is a lot
harder to find but no one has ever asked me for one of those. I’ve
only ever seen 3 and am keeping mine. Much rarer and prettier than
taaffeite which has much better press, so it isn’t worth much. I
also have a classic little chrysoberyl flat that has a totally
transparent well terminated hex crystal growing out of the side. It
changes from raspberry red to a rich emerald green. I have refused
some silly prices for it. This little beauty is rare, pretty and
has had lots of good press.

Valuing crystal specimens is not as simple as valuing jewellery
The 3 most important factors governing specimen price are
location, location and location. A specimen of unknown origin is
worth as much as a piece of rough. Next there is the aesthetic
value, based on the visual appeal of a cluster which can often
out-value the intrinsic material value. Then there is crystal
quality, termination, habit, associate and inclusion to add to the
standard jewellery valuations for hue, saturation and material. A
really pretty amethyst spray will outsell ugly emeralds on
mica/basalt any-day.

Mineral specimens are a great source for rough when you have a
customer that can afford to pay for a guaranteed natural, untreated
and provenanced gemstone. Don’t let the dealers know what you are
doing or you will lose a supplier.

If anyone has a display that includes coloured stone jewellery but
does not have specimens as props should feel ashamed of themselves
for ignoring the cheapest ‘silent salesman’ money can buy.

Tony.

No, I am not in the business of selling specimens, rough or stones.
I fix sick rocks.

#4 
    Rarity IS the supply part of the supply  and demand equation.

Dear Dale, I appreciate your view, and I used to share it. However I
came to realize that rarity means nothing if few buyers want it. The
flip side of this is: very common items, in high demand often sell
for very high prices. In the second case the material is not rare,
and the demand is very strong.

Two cases in point:

Taaffeite - a very rare, hard, beautiful gem that very few know of,
or care about. It should sell for a “million bucks” a carat based on
rarity.

Pyrite and Amethyst - in the mineral world these are very common
minerals. Beautiful specimens of these, no matter how many come onto
the market, go for high prices and always sell-out.

Regards, Steve

#5

Dear Steve, Supply (rarity) does not determine demand. That is not
how the supply/demand equation works. Supply in combination with
demand determines price. That is why, as you noted, that a very
rare, beautiful gem will not sell for a “million bucks” if nobody
wants it. There is no demand. Hence, a low price. Conversely, an
item with a plentiful supply can still command a high price if there
is sufficient demand. One caveat here is that the supply can be the
"perceived" supply. An item need not necessarily actually be rare,
but if the demand is high and everyone thinks it is rare, then it
will command a higher price.

Demand, on the other hand, is driven by many things. As Richard
points out, marketing is one of the factors that can drive demand.
A good marketing campaign can create great demand out of thin air.
Pet rocks were a good example of this. It’s relatively easy to
determine supply, but if one could accurately predict what will be
in demand tomorrow, you would be very wealthy. Indeed, some people
make their living this way (Faith Popcorn is a good example).

The laws of supply and demand do still work.

Regards,
Dale