After posting solid monthly price gains since late 2009, the IDEX Online Global Polished Price Index paused during July. For the month, the Index averaged 117.4, with no notable price spikes or dips.

 

Two key factors had an impact on polished prices in July:

 

·        Many diamond traders were on holiday, so trading volumes were lighter than normal.

 

·        Pre-show orders by loose diamond wholesalers ahead of the JCK Las Vegas and Hong Kong and post show orders.

 

The pre-show orders pushed prices of many items upwards but orders from jewelers at JCK Las Vegas and Hong Kong were somewhat below expectations, leading some diamond dealers to roll prices back while others struggled to maintain their current prices.

 

As a result, price action varied notably by diamond size, with two- and three-carat diamond prices edging up compared to June levels. However, prices for diamonds smaller than two-carat as well as larger diamonds – four- and five-carat sizes – fell from June.

 

Unfortunately, the unevenness of prices of polished diamonds did not trickle up the pipeline: rough prices continued to edge up. Thus, polished diamond dealers felt renewed margin pressure.

 

While the July IDEX Online Global Polished Diamond Price Index remained flat, the news remains positive: polished diamond prices have recovered almost half of their precipitous decline that occurred in 2009. Global polished diamond prices bottomed at 108 during mid-2009, about 8 percent below their current level. At its height, the IDEX Online Polished Diamond Price Index stood at just above 128 in August 2008, about 9 percent higher than today’s average prices.

 

Over the past year since mid-2009, the IDEX Online Polished Price Index has risen by 7.8 percent, but only by a miniscule 0.1 percent from June; this confirms that prices hit a plateau in July.

 

The graph below summarizes the IDEX Online Polished Price Index performance over the past two years.

 

Source: IDEX Online

 

We believe that diamond demand will continue to grow, resulting in a November-December holiday selling season this year that could see jewelry sales rise by a mid-to-high single digit level.

 

For detailed information on July polished diamond prices, including details on price changes of goods by size, please click here.