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DIAMOND MARKET OVERVIEW

The polished diamond market is showing a mixed picture with news from the US suggesting a slowdown in spending on luxury items causing nervousness. However, traders on the other side of the Atlantic are reporting strong demand in Italy and France for smaller sizes, 20, 25, 30, 40 and 50 pointers, FGH-colour, VS-SI. In Hong Kong, wholesalers are still reporting healthy buying activity by retailers and jewellery manufacturers, although this is expected to slow as Chinese New Year approaches. In the US, the National Retail Federation forecasts retail sales in 2008 to rise 3.5%, their slowest pace in six years. Some luxury retailers have also reported a set back in spending by their customers due to the uncertain economic environment. This apparent slowdown in the main US market will clearly affect the diamond industry as a whole and is causing skittish trading in some areas of goods as reflected in the prices recorded to PolishedPrices. On Monday, the index showed a surge in volatility in Fine one carat diamonds which jumped 12%, after falling 7% the previous week as traders are looking for direction.



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