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DIAMOND MARKET OVERVIEW

Traders are saying the weak demand situation in the US is beginning to impact on the overall market. Liquidations in cheaper polished, especially pique pointers are being reported more frequently. Selling pressure is expected to continue in cheaper polished so long as the US demand picture does not improve. There are concerns that it will impact in the larger sizes which may lead to a price correction. In India liquidity has reportedly tightened causing further selling pressure on manufacturers. Traders are also increasingly concerned about speculation in larger goods. Partly this has been fuelled by the weak dollar and anticipated world production shortages. Inevitably these factors will have an effect on overall prices. More optimism is being reported however in the Far East with news of healthy buying activity mainly in cleanish goods at last week’s Hong Kong Watch & Jewellery fair. Traders are expecting the tight supply situation in Fine or cleanish polished to continue, which should support further price increases in these areas. In the broader market, the PolishedPrices index ended the week more or less flat at 130.5 points. Among the benchmark sizes, Fine 0.3 carats jumped 6.4% at Monday’s opening. Mixed 1 carat was the weakest performer, falling 11.5% on the week.



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