(IDEX Online) – Prices of polished diamonds increased on average by 1.0 percent in June compared to May, according to the IDEX Online Polished Diamond Index.

 

The full analysis of the polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members here.

 

This is the second consecutive month that the index has increased on a month-over-month basis. Year-over-year, the index declined 3.8 percent, completing a year of such declines.

 

Good jewelry demand in the U.S. during the first half of the year resulted in increased demand for polished diamonds and jewelry by retailers, the economic factor behind the rising prices in June. The good, though not wildfire, demand at the JCK Las Vegas Show gave wholesalers enough confidence to hold on to their asking prices. They had to compromise a little to close deals, but the overall result was an increase in prices.

 

 

The price index of almost all key sizes of round shape diamonds increased in June on a month-over-month basis. The index for the important 1-carat rounds increased a robust 1.2 percent compared to May and 5-carat rounds jumped by 3.0 percent in June.

 

Four-carat rounds lost 2.7 percent in June compared to May and half-carats declined by 1.1 percent.

 

On a year-over-year basis, the price index for round goods declined for all key sizes during the month. One-carat rounds are lagging 4.4 percent behind their prices a year ago, the average price of 2-carat rounds are 5.3 percent lower and 5-carat rounds are 12.9 percent below their prices a year ago, despite the recent increase in price.

 

Consumers’ continued interest in square cuts, especially Princess-shaped diamonds, is a choice of size over price. Compared to rounds of the same size, color and clarity, Princess cost less, and consumers are willing to make the shift from the traditional rounds for the benefit of decreasing the outlay.

 

On a year-over-year basis, the three key-size Princess shape diamond categories increased handsomely, mostly the 1.5-carats, which increased by 12.3 percent compared to June 2012.

 

 

Outlook

Last month, we wrote that after months of forecasting a lackluster market in the short-term, we are now upgrading that forecast to a cautiously optimistic one, expecting an improvement in prices of polished diamonds in the short-term. The improvement seen in June provides additional confidence to that expectation.

 

U.S. retailers enjoyed a good run in the first quarter of 2013, and the most recent information indicates that the trend continued into the second quarter. Solid demand from China, Japan and India provide additional reasons to expect a temperate improvement in the coming months.

 

We expect polished diamond prices to increase in the long-term.

 

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.