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TECHNICAL INDICATORS

With the high volatility that has been a feature of the diamond trade recently, it is often difficult to pick out underlying trends.

There are several statistical methods that can be used to smooth out the raw figures, and the results of one method are shown below.



The method illustrated is that of cubic splines, which without going into too much detail, fits a series of smooth curves to the data.

We used this method to analyse the overall PolishedPrices index since last June, when the index moved to daily publication.

The method seems suggest that the bull run in prices, which began in October 2007 seems to have ended in early February 2008, and prices have been on a slight downward trend since then.

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