The general concern in the diamond market is that rough is too strong. Polished is trading in a steady pattern in comparison to rough, although there are some pockets (5 crt+) where traders say demand is remarkably strong. This is however at wholesale level. The sell through to consumers, even in larger sizes, appears to be facing some resistance. In the Far East, wholesale trade activity in the region is generally slow because of the Chinese New Year festivities. But retailers are saying that the financial market volatility has put off high ticket spenders for the moment. US demand weakness has been highlighted by the results of a number of jewellery retailers, such as Tiffany, Zales and the recent bankruptcy filing of Friedman’s. In India, the general outlook is clearly becoming more cautious. While rough is witnessing strong demand due to a tighter supply situation, Indian traders say there is no actual shortage in the bulk of polished. Most traders believe it’s a question of price if you need certain goods. The fact that rough buying activity continues, means factories are continuing to produce polished despite evidence of weaker demand at retail. Some analysts are beginning to warn for a correction in rough if the sell through to consumers does not pick up. Meanwhile, the overall PolishedPrices index traded in narrow ranges opening 0.9% higher on Monday to end the week almost unchanged at 130.03 points. On the weekly index, Fine quality one carats lost ground on Monday, opening 6.9% lower.

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