Summary

• Trading markets winding down for summer vacation.
• Investment Diamond prices remaining stable despite lower trading volumes.
• Rough prices easing back after recent hikes.

Trading Notes

The dichotomy between the rough and polished diamond markets have come to the fore once again with recent increases in rough prices not flowing through to polished markets. Investment grade polished diamond prices remain steady with asking prices on larger diamonds easing up on thin trade activity. Stable demand for 1-2ct investment diamonds and good makes (EX-VG) of larger goods (+2ct) becoming relatively scarce. As noted last month, we see good value in the 2ct, D-F, VVS goods with the E/VVS2 continuing its upward movement that commenced in February. Sellers are still trying to hold out for higher prices leading into the traditional summer vacation period for the diamond trading industry.

Market News

Last week’s DTC sight estimated at $350-$375m considerably down on previous sight with decreased sight value attributable to low production levels of last two quarters. Rough price increases that commenced in April-May continuing but expected to ease over August. Indian consortium buys rough directly from Namibia’ Namdeb and side-steps DTC sales process. New industry organisation, International Diamond Board (IDB) was created last week and aims to create and sustain strong consumer demand for diamonds. Diamond Dealers Club of South Africa warns of forged GIA and EGL (South Africa) certificates for treated stones. South African government looking to revamp business model of the State Diamond Trader. ALROSA president resigns after operational irregularities found during audit.

Comparative Indices and Annual Returns

Comparitive Indices and Annual Returns - July 2009