The IDEX Polished Diamond Price Index - July 2019

As usual in the summer months, the diamond trade takes its business volume down a good few notches. As such, there were no surprises, i.e. no significant price changes of polished diamonds.

Therefore, this is as good a moment as any other to offer a positive comment and draw attention to the long-term perspective of the price developments of polished diamonds. While there has been a very slight decline in prices of diamonds across the board, diamond prices have overall been performing satisfactorily over the past years, different from other commodities.

There are several reasons for that. Commenting on the diamond market, Ronnie VanderLinden, President of the International Diamond Manufacturers Association (IDMA), said that "the US economy is still pulling the cart. And still, the market for polished, while subdued, is working [and in the USA] retail sales are rising. We trust jewelry will soon follow suit. It's not August yet. In September, we'll start the annual race to the holiday sales season. I am reasonably sure that we'll do much better than the market currently suggests!"

Since the beginning of the year, diamond prices have declined very slightly, as demonstrated by the various graphs of IDEX's Polished Diamonds Price Index. The Daily IDEX PPI for July 2019 began at 122.51 and ended at 121.76.

The graph below demonstrates over the four-year period represented that polished diamond prices have been very stable and that, during the 48 months of reporting, they have decreased just a little more than two percent.

On a year-over-year basis, July 2019 continued the trend that was recorded throughout the first half of 2019. In July all reported size categories unperformed, but price changes for categories from one carat up to three carats were really miniscule.

Half caraters and diamond of four carats and larger dropped several percentage points. This latter is a welcome change since price changes in the two to three carat categories were quite volatile during the previous month of the year.

• 0.5 carats = -8.3%
• 1 carat = -2.7%
• 1.5 carats = +0.0%
• 2 carats = -2.8%
• 3 carats = -5.6%
• 4 carats = -24.2%

Outlook

Looking forward, it can be expected that diamonds prices will slowly being picking up. With the scaled back production in India, the low rough and polished trading volumes, diamantaires are already reporting demands for goods and the consequent lack of goods in demand in the market.

This optimism is justified by the recent reports of an improving US retail market.

Analysts said that June's figures underscore the importance of consumer spending to the U.S. economy. Business investment has weakened, factory output has faltered, and slower global growth is weighing on exports.

NRF Chief Economist Jack Kleinhenz said: "These are impressive results showing that the consumer remains engaged and that consumer spending gave a boost to the economy in the second quarter. The numbers are consistent with elevated consumer sentiment, healthy household balance sheets, low inflation, and job gains." He noted that wages were increasing and that with the continued creation of new jobs the retail market could expect to see further growth.