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DIamond Market Report

Diamond prices held up well during 2009 despite the challenging macro-economic environment. After declining approximately 25 percent during the last quarter of 2008 and the first quarter of 2009, prices for investment diamonds stabilized during the second quarter of the year and held firm during the second half of the year finishing the year only 10 percent down. With the expected improved macro-economic environment and continuation of demand outstripping supply for larger better quality diamonds, prices are set to rise during 2010.

Stable prices and demand continued right through the all-important Holiday Season with some shortages being seen in 1.00-2.00 carat, D-H colour, +VS2 clarity goods. US market activity was in-line with subdued expectations European markets were mixed while Asian markets continue to show signs of healthy activity. Speculative activity within the rough diamond market is persisting on the back of scarcity of available goods on the market and expectations of firmer trading environment in the immediate future.

At the upper end of the market, prices for special and unique diamonds were at historical highs throughout 2009 with numerous world record prices being broken on the global auction market illustrating the considerable appetite for these diamonds and the robustness of the market.

Market news

Diamond Market Recovers on Economy Rally, Petra Says

The rough diamond market recovered “significantly” in the second half of 2009 and will benefit this year as customers replenish inventories as the global economy improves, Petra Diamonds Ltd. said.

"The market has come back nicely with very encouraging signs,” Chief Executive Officer Johan Dippenaar said today in an interview. “We can see the numbers of dealers, cutters and polishers coming back in the market buying rough."

Tiffany & Co, the world’s second-largest luxury-jewelry retailer, said yesterday that holiday sales rose after wealthy consumers started spending more. Debswana Diamond Co., the joint venture between De Beers and Botswana’s government, said today it will boost diamond production by 17 percent this year if improved demand holds.

Rough diamond prices rose in the second half after producers slashed production earlier in the year and gem dealers rebuilt stockpiles for Christmas. De Beers, the world’s largest producer, cut output 73 percent in the first half of 2009.

Christmas sales look "a bit better, but it’s quite a long way off blooming health,” Des Kilalea, a London-based analyst at RBC Capital Markets, said. “People aren’t as desperate as they were last year."

"Confidence has Returned"

"Confidence has returned to the rough diamond market, with financing now beginning to open again to the pipeline" St. Helier, Jersey-based Petra said in a statement. "Certainly levels of competition for rough diamonds are now much closer to normal levels and serve to underpin the stability of the market."

Petra said analyst reports of a rise in pre-Christmas jewelry sales in the U.S. bodes well for the rough diamond market this year. Sales at Tiffany’s main New York store increased 20 percent between Nov. 1 and Dec. 31.
(source www.bloomberg.com)

Forecast: Polished Diamond Prices Set to Rebound

IDEX Online Research is ready to declare that the market has seen the bottom for polished diamond prices. From here, prices are headed higher.

The big questions are these:

1. How high are they headed?
2. How rapidly will they rise?

IDEX Online does not have the exact answer to those questions, and they do not own any diamonds for trading purposes, but here’s a likely scenario for polished diamond prices:

• Polished diamond prices could be volatile in 2010 as the pipeline begins to restock.
• Polished diamond price inflation will likely be artificially high in 2010, as the restocking process begins.
• Over the longer term, polished diamond price inflation will likely stabilize, perhaps at or slightly above the historic annual inflation rate of 3-4 percent.
• The wild card relates to potential demand from new markets such as India and China.

Based on the American market, which currently consumes roughly half of all diamond jewelry in the world by value, demand is likely to perk up even more this year. Not only will retailers be forced to restock their empty showcases, but also they will be stocking diamonds in anticipation of stronger consumer demand.
(source www.idexonline.com)

Famous Diamonds

The Gruosi Diamond

The famous Swiss jeweller Fawaz Gruosi is credited for starting the current enthusiasm for black diamond jewelry, launching the current fashion for black diamond in 1996 by creating some eye-catching collections of jewelry and watches set with black diamonds.

He is now exhibiting a heart-shaped black diamond, the largest black diamond of such cut in the world, weighing 115.34 carats. This heart is the centrepiece of a necklace made of 58.77 carats of smaller black diamonds, 378 white diamonds and 14.10 carats of tsavorite garnets, set in white gold.

It took three years to cut the Gruosi Diamond. Received rough in 1998 from India and weighing 300.12 carats, it was originally planned to have an oval shape, but as cutting progressed, the material of the stone proved extremely fragile and very difficult to work. (This is not uncommon. The Amsterdam Diamond, another famous black diamond, is a stone whose rough form was originally intended for industrial use. When they tried to saw the diamond apart, they realized it was tougher than most industrial diamond material, a characteristic of a gem-quality black diamond. It was faceted from a 55-carat rough into a 33-carat pear shape.) Another famous black diamond is the 67-carat Black Orlov.

The decision was made to cut this diamond in a heart shape, despite the considerable loss of carat-weight. In fact, the final weight loss after cutting and polishing was approximately 184.78 carats. This heart-shaped diamond was cut in Antwerp by one of the greatest black diamond cutting specialists in the world.
(source http://famousdiamonds.tripod.com)

From Our Inventory

We are honored to invite you to visit and register on our web site www.eliazdiamonds.com. We hope it will be helpful any time you would like to find suitable stones. If you feel any inconvenience with our search system, please contact dina@eliazdiamonds.com who will assist you.

The following is a sample of some of the diamonds we currently have on offer:

In this issue

• Diamond Market Report
• Market News
• Famous Diamonds:
  The Gruosi Diamond
• From Our Inventory

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