Rather than report on the latest ArcelorMittal mill shut-downs due to slumping steel demand by Detroit’s Big 3 automakers, some metals markets may be getting a boost. Several news reports leaked some information around a small thank you gift President Elect Obama intended to purchase for his wife for enduring a lengthy election campaign. According to the article, the ring is worth GBP 20,000 or $29,810. But an Obama spokesperson says the stories are just rumors and Obama had no intention of purchasing what has been reported as a rhodium/diamond custom ring.
The important question to ask here of course is not whether the story is true or not but “how much is such a hypothetical ring really worth?” And personally, I think the news stories have been inflating the ring’s actual value. Take this one here….stating rhodium retails for $7500/ounce. Ouch – Kitco reports rhodium in the mid $700’s/ounce:
In fact, rhodium is actually selling at it’s one year low.
Now let’s get to the diamonds. Given the picture of the intended ring, one big cost savings factor relates to the size of the diamonds. Even if selecting the highest quality diamonds, the carat size looks quite small according to the pictures. Even with $10,000 worth of diamonds (which is doubtful) it’s hard to believe this ring could be worth $25,000 – $30,000. That leaves the workmanship and retail mark-up. Let’s hope if Obama does decide to get that ring, he brings his cost break down worksheets with him! Heck, we’ll provide a should-cost analysis for free.