IDEX Online Research: Polished Diamond Prices Rise in August
September 06, 10
Polished diamond prices edged higher in August, despite modest trading levels during this summer holiday period, according to the IDEX Online Global Polished Price Index. This trend provides evidence that underlying demand for diamonds is solidifying. Further, during the final days of August and into early September, diamond trading patterns suggest that volume is picking up and prices are poised to continue to rise.
Month-to-month polished diamond prices up a solid 0.5 percent increase over July’s average of 117.4, according to the IDEX Online Global Polished Price Index. Year-to-year, the average price increased a strong 8.5 percent from August 2009.
After a brief pause in July, polished diamond prices continued their upward movement in August, lengthening a trend that began that began in late 2009. For the month of August, the IDEX Online Global Polished Price Index averaged 117.9, up from July’s average of 117.4.
Here’s what is most important: the IDEX Online Index began the month at 117.3, and ended it at 118.0. The Index reached 118.2 mid-month, and remained in a strong trading range between 117.9 and 118.2 for the balance of the month. The graph below illustrates daily price trading patterns for polished diamonds.
After bottoming in mid-2009 at around 108, the IDEX Online Global Polished Price Index has risen almost every month since late last year. Prices have risen steadily, with only a pause in July. We believe that this indicates that fundamental underlying demand is responsible for most of the price gains.
Source: IDEX Online
Two factors continue to push polished diamond prices higher:
· Rough diamond prices are strong and holding steady.
· Retailers are beginning to re-stock goods in preparation for the upcoming holiday selling season. Inventories hit an all-time low earlier this year. Fortunately, retailers have come to the realization that they can’t make a sale if they don’t have any inventory.
Based on August data, the IDEX Online Global Polished Diamond Price Index, diamond prices have recovered about half of their precipitous decline that occurred in early 2009. Global polished diamond prices bottomed at about 108 during mid-2009, almost 9 percent below their current level. At its height, the IDEX Online Polished Diamond Price Index stood at just above 128 in August 2008, about 8 percent higher than today’s average prices.
The graph below summarizes the IDEX Online Polished Price Index performance over the past two years.
Source: IDEX Online
We believe that polished diamond demand will continue to solidify, resulting in a November-December holiday selling season this year that could see jewelry sales rise by a mid-to-high single digit percentage level.
The full analysis on August polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members. Click here for more information on how to subscribe or become a member.