Holiday jewelry-buying guide

This Deal of the Day comes from Sarah Morgan at partner site SmartMoney.

Call it the Beyonce effect. In spite of the sluggish economy and the tight job market, more consumers say they'd like someone to put a ring on it this holiday season. Jewelry ranks higher on holiday wish lists than laptops, smart phones, digital cameras or TVs, according to one survey, and it was the only category to grow more desirable since last year.

And to shoppers' surprise, in spite of the skyrocketing price of gold, it's not a bad year to be in the market for sparkle.

Jewelers are feeling the squeeze of higher wholesale prices, but they haven't passed that along to consumers yet, says Ken Gassman, a jewelry industry analyst. So far in 2010, retail prices are up just 1.7%, compared with supplier prices for jewelry and watches, which are up 9.3%.

Longer-term trends also suggest that prices for diamonds, rubies, sapphires and other gemstones are set to rise in response to increased demand from the emerging global middle class, particularly in India, says Antoinette Matlins, a gem expert and the author of "Jewelry & Gems: The Buying Guide."

Until those wholesale price hikes trickle down to consumers, most likely by early next year, Gassman says, there are deals to be found. About 30% of all jewelry sales take place in November and December every year, and at the middle to lower end of the jewelry market, industry experts suggest consumers will see discounts of up to 50%. "This is going to be a discount Christmas," Gassman says.

Here are some holiday jewelry shopping tips for three types of consumers:

Shopping for an investment. For diamonds and "the big three" colored gemstones (rubies, sapphires and emeralds), the key is to be sure you're getting what you're paying for.

These stones can cost hundreds or thousands of dollars per carat, and factors that aren't obvious to a layperson can make a big difference in their value. That means asking a lot of questions, particularly about any treatments that may have been applied to a stone, says Doug Hucker, chief executive of the American Gem Trade Association. Some treatments, like heat, are common for precious gemstones, but others, like filling flaws with resin, will sharply reduce the value of a stone.

Get all representations about the quality and treatment of the stone in writing, and get them verified by a gemologist appraiser before finalizing a purchase, Matlins says. If you're planning to spend thousands, you might consider hiring a gemologist to come look at a few options with you, she says. You'll likely pay at least $100 an hour for their time, however, so be sure to narrow down your options first.

The value of a "big-three" stone or a diamond is determined by how it ranks among the four Cs -- color, cut, clarity and carat weight -- with color being the most important factor, Hucker says. It's rarer to find large rubies than diamonds, so you pay much more per carat for a large ruby than for a small one, he says.

Prices for fine gems are already on the rise, with diamond prices in particular boosted by a weak dollar, Gassman says.

Shopping for color. If the design and fashion of a piece matter more to you than its value as an heirloom, avoid expensive gems -- but be aware that the rules of what determines a stone's price aren't as clear-cut for this segment of the market. "Colored gemstones is what we call the Wild West," Gassman says. "There are basically no standards."

So instead, a few rules of thumb: You'll typically pay most for red, blue and green stones because those are perennially favored colors, Hucker says. But several alternatives can be less expensive than the most coveted gems. A 1- or 2-carat emerald can cost up to $11,000 per carat, while the same size peridot, also green and springy, costs about $60 to $300 per carat, says Helena Krodel, a spokeswoman for the Jewelry Information Center.

The price per carat also doesn't rise as sharply for larger stones. Shoppers looking for a big, bold piece could consider looking for red spinel or blue tanzanite instead of rubies or sapphires, and tourmaline comes in a rainbow of pastel shades.

Shopping for a bargain. Budget-conscious shoppers should be in luck this holiday season. Midrange retailers like Zales or Jared are expected to cut prices by up to 50%, says Jeff Green, a retail industry consultant. (High-end stores like Tiffany aren't likely to offer the same discounts.) But be patient, he adds. Because jewelers have more inventory to move than other retailers do, promotions should increase as the season goes on.

Online shoppers should pay particular attention to a site's return policy, Krodel says. "No matter how great the pictures are, you really want to touch and feel that piece of jewelry, because it might look different in person," she says. Make sure you can get a full refund if necessary, and use a credit card, not a debit card, so you'll be protected in case of a dispute.

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