Better load up on big fat holiday diamond and gold jewelry while it's still cheap

By Dian Vujovich

Okay, cheap might not be the right word to use when referring to terrific jewelry gifts like 5-carat diamond rings or golden bangles. But, if supply is any indication of how prices can jump when it is down and demand up, now might be the perfect time to purchase the gifts that say so much before these glitzy treasures cost more than you’re willing to spend.

Even though the price of gold is under $1700 an ounce (which some might consider high and others low) there apparently is a shortage of the stuff. Add to that a shortage of large-carat diamonds and it’s enough to make a ball queen cry.

“Jewelry has a pretty slow turn, which means marketers and retailers tend to buy the product well in advance of sales,” said Paula Rosenblum, managing partner and analyst at RSR, Miami in recent LuxuryDaily.com story.

But Rosenblum added that while the luxury segment is on a roll, “If the price of gold continues to rise, so will the asset value of the luxury consumer.”

According to a study from Bain & Co., diamond demand is likely to be greater than its annual 2.8 percent supply growth. When that happens, chances are golden for diamond price increases—particularly on large-carat diamonds. They’re tougher to come by that those tiny unfashionable ones.

Of course all of that can change in the future as annual diamond production is expected to grow by 2020 surpassing pre-recession levels. But it’s not that future we’re speaking of. We’re talking today and dazzling your honey with a smashing holiday gift.

As for the price of gold, the World Gold Council doesn’t see it falling dramatically any time soon. Neither do a number of buy-gold buffs.

In case you’re wondering, buying glitz isn’t just a U.S. thing. There’s a huge interest for Elizabeth Taylor sized bobbles and rings from the nouveau rich around the globe. Like the newly minted million- and billionaires in Russia and China, Brazil and India.