After more than a year of sharp increases, the prices of certain diamonds may soon start to weaken, dealers tell JCK.

“The prices of better goods, GIA certified, we are seeing softness in,” says Atit Mehta, vice president of Atit Diamond in New York City. “We are seeing a five percent drop.”

But he predicts this won’t have that much impact on prices here in the United States.

“Most of the New York dealers didn’t pay the crazy prices,” he says.

Jeff Fischer, president of Fischer Diamonds in New York City, says we are witnessing a “minor correction.” But he thinks this “cooling off period” won’t be a bad thing.

“Before, if you made a dealer an offer, they weren’t listening, because they would say prices would just go up in the near future,” he says. “Now you are not seeing the cockiness. Sellers are more receptive. I’m glad someone is throwing some water on the fire. This is a manic-depressive industry. And we’ve been manic.”

Vasant Mehta, Mumbai-based principal of V. Rameshchandra and Co., doesn’t foresee an extended period of declines, at least in the market in India.

“The demand is still firm,” he says. “The price rises have stopped, and some of the rough prices have dropped so much, that people are nervous. But [in Mumbai], the confidence level has not gone down. It is just a correction period from the very high prices that we have seen this month.”

Among smaller goods, Nicky Mehta, principal of Diamond Days in New York City, says the price of three- to 15-pointers seems poised to drop in the next week or so.

“It won’t be a huge drop,” he says. “But they will definitely fall. There are too many of those goods out there and they haven’t seen huge demand.”

Like Fischer, he doesn’t look at the declines as a bad thing.

“We saw a 50 percent increase on those goods, so we needed to see some kind of softening,” he says. “A lot of the retailers I talked to have sticker shock.”

He says demand is still firm for one pointers and half-pointers.

Mark Boston, managing director of H. Goldie in London, a DTC broker that represents many Indian manufacturers, says many of his clients seem to be concerned about the U.S. economy.

“People aren’t paying the premiums on the rough that they were before,” he says. “The Vegas Show was strong and the mood was positive. But the delay in the United States over extending the debt ceiling did unnerve the Indians a bit.”