Summary

• Investment diamond prices remaining stable while special diamonds fetch record prices
• Rough-polished market dislocation continues

Trading Notes

Market dislocation between rough and polished segments continues leaving many players bewildered regarding market direction and manufacturers struggling to boost profit margins. Major diamond producers continue their policy of holding rough goods off the market providing support for rises in both price and demand levels over last quarter, however polished prices have yet to respond. Notwithstanding this, polished market sentiment is more positive leading into pre-Holiday Season buying period and market has responded with increased trading activity levels. Tertiary and geographic specific factors including record high gold prices which may shift Indian jewelry market away from gold and into diamonds in upcoming Diwali season and depressed US Dollar making diamond purchasing cheaper in non-US markets should provide some support for continued stabilization in mid-to-upper end of polished market. US and European markets remain mixed yet stable while Asian markets are stronger. Ultra-high-end Special Diamond market bucking the overall trend with record prices being fetched at international auctions showing continued resilience of this market.

Market News

Prices remained stable at recent DTC September sight which was valued at around $300 million. DTC expected to continue with policy of holding rough goods off the market throughout the rest of the year. Marginal prices increases on Canadian and Russian rough. Petra Diamonds recovers huge 507.55 carat white diamond with estimated valued of $12-$13 million from Cullinan mine in South Africa. Sotheby’s sells 8.74 carat fancy intense blue VVS1 emerald-shaped diamond for $5.7 million in Hong Kong breaking diamond price record for Asia.

Comparative Indices and Annual Returns

Comparitive Indices and Graphs - Oct 2009