January 21, 2021 – Earlier this month, I gave an interview to the Madrid-based, Spanish-language gem and jewelry trade publication Gold&Time. This news source serves Spain and the Mid- and South-American gem and jewelry markets. Asked what lessons we had learned in the past year. Here are some excerpts for my reply:
“In our industry which consists of diamond cutting, polishing, and trading, you deal with the present, prepare for the long term and try to avoid past mistakes – of course, easier said than done. Most of us enter the diamond industry for the long term; if you’re not prepared to do that, you will be in it for the short term.
So what lesson(s) have we learned? Semper Paratus, Latin for “Always Ready.” One of the significant hurdles we face is the financial liquidity-to-debt ratio. Anyone who wants to stay in business knows that it is crucial to survival. History repeats itself, and we need to be prepared. Also, and this goes for every aspect of life, don’t panic! Panic leads to bad decision-making or paralysis. We’ve certainly been through financial crises before and come together stronger. Still, many times we revert to our old habits. We must be prepared for the possibility of a next time.
The past year has been the most challenging and unexpected ever. We lost family members, dear friends, and colleagues to this horrible pandemic in the months past. We mourn their loss. I was infected with the Coronavirus, as were my family members and colleagues at the office. We’re thankful for getting through it relatively unscathed. This taught us how seriously we must take the experts’ opinions. That goes for our industry as well! We all want to be strong, but we are vulnerable as well.
In the USA, Joe Biden, our newly installed president, rightfully warned us that the worst may yet be to come. We’re bracing ourselves and hoping the vaccination program will positively affect us worldwide in many ways.
Fortunately, despite the pandemic, many of us, but certainly not all, have been able to cope business-wise and personally. Online consumer spending mushroomed in 2020. It is more difficult for the middle market traders accustomed to facing each other to develop online means of distribution, but it is important nonetheless.
Gold & Time’s editor, Salvador Hernandez, also requested my input about diamond prices.
“In 2020, diamond price developments were V-shaped. In the year’s first half, diamond prices fell, rebounded at the end of the 3rd quarter, and became even stronger during the holiday sales season.
In 2021, it will all depend on the versatility of the players within the supply chain. The rough diamond producers have already adapted their sale methods to allow buyers to purchase rough with confidence. Who would have believed a year ago that you could buy rough online? And who would have thought consumers would be so ready to buy polished diamonds and fine diamond jewelry online?
But advanced technological solutions are now available to make this a reality. In the midstream, traders are adopting new digital tools, accessing their markets through their own channels, or utilizing larger online trading platforms. Retailers are taking similar measures.
In retail, we were introduced to a new concept: “revenge spending.” The result of this “revenge spending” by the consumer was that jewelry and diamond jewelry were among the top performers in retail during the USA’s past holiday season. Unexpected but highly satisfying. It helps to see the half-full glass! Let’s all remain optimistic! Therefore, prices will remain firm if we all continue to trade and create demand.
Overall, 2021 is looking good!