IDEX Online Research: Polished Diamond Prices Decline 6.9% in July

(IDEX Online News) – Prices of round polished diamond diamonds dropped in July, dragging down the IDEX Online Global Polished Diamond Price index to 136.6, a 6.9 percent year-over-year decline. This is the first year-over-year decline in more than two years.

Source: IDEX Online Research

 

 

Polished diamond prices fell 2.4 percent in July compared to June. However, while buyers are turning their backs on round cut diamonds, they are turning to fancy cuts, which are responding with price increases. This trend is most notable in the U.S. market, where buyers are seeking something "different." Retailers are following this trend, although diamond traders have been slow to respond.

Source: IDEX Online Research

 

 

Strong demand from retailers, mainly in China and India, led to runaway prices in the second quarter of 2011. Prices, however, went too far and in August 2011 the bubble burst and prices declined. They have yet to return to their earlier level and buyers, sensing the pressure manufacturers are under, have held out, buying just the bare minimum.

Source: IDEX Online Research

 

The wait is paying off for buyers, and stressed diamond traders, who are in need of increased turnover, are lowering prices.

At the same time, fancy cut diamonds, mainly princess and cushion cuts have been a real bargain, with buyers flocking to buy them. This trend has strengthened in the past couple of weeks, resulting in the current decline in prices of rounds and the subsequent increase in fancies.

Outlook

Polished diamond prices have increased on average by about 4 percent annually. The recent bubbles – in 2008 and 2011 – and the following declines are normal economic short-term peaks and troughs. The long-term view remains unchanged (especially on the back of recent figures showing that global diamond production is slowing) – prices are set to increase.

In the short term, prices could start their recovery as soon as this September when pre-holiday season pressure begins.

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.