(IDEX Online News) - Global polished diamond prices continued to rise in December 2010, according to the latest data from the IDEX Online Polished Price Index. The Index averaged 118.6 in December, up 8.6 percent over December 2009 and 0.6 percent over November 2010.

 

The IDEX Online Polished Price Index is a composite index reflecting diamond prices based on real time asking prices of an inventory of over $4 billion.

 

·        Polished diamond prices rose throughout the month of December, though they softened very modestly in the final ten days of the month, mostly due to lack of trading related to the Christian holidays and New Year vacations.

 

·        Prices of all key diamond sizes rose in December, with three and four carat diamonds showing the largest price increases.

 

·        Polished prices have continued to rise since the end of the month. At publication time, the IDEX Online Polished Diamond Price Index is at 119.46.

 

·        U.S. jewelers reported diamond demand was weak early in the holiday selling season, but picked up solidly close to Christmas.

 

The graph below summarizes monthly global polished diamond prices, based on the IDEX Online Polished Diamond Price Index.

 

Source: IDEX Online

 

Annual Diamond Prices Jump

Polished diamond prices have historically shown an annual price increase in the low single digit range, typically 2-3 percent annually. However, in 2008 prices rose by 9 percent, only to fall by about 13 percent in 2009.

 

In 2010, global polished diamond prices leaped by 6 percent. This large gain is typical of a “recovery rate,” since prices had fallen so dramatically the prior year.

 

Outlook: Polished Diamond Prices Headed Higher

We believe that polished diamond prices will likely react to near term demand: now that many uncertainties have been eliminated, prices are poised to rise in 2011.

 

Longer term, as fundamental demand from consumers shows solid strength, prices for polished diamonds will continue to rise.

 

The full analysis of the polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members here. Click here for more information on how to subscribe or become a member.