Certified polished diamond prices were stable in March as market sentiment improved despite slow trading. Healthy Far East and U.S. demand helped boost the trade but tapered off toward the end of the month. While prices declined in the first three months of the year, the diamond industry closed the first quarter in an improved condition from that of the end of 2011 and a sense of stability prevailed in the market.
In March, the RapNet Diamond Index (RAPI™) for 1.00 ct. polished diamonds rose 0.2 percent to 94.36. The 0.3 ct. category increased 1.4 percent to 16.26 while 0.5 ct. dropped 1.1 percent to 34.44. RAPI for 3.00 ct. diamonds fell 0.3 percent to 342.32.
During the first quarter of 2012, the RAPI for 1.00 ct. diamonds fell 2.7 percent, while 0.3 ct. stones rose 0.9 percent and 0.30 ct. diamonds increased a slight 0.2 percent. The RAPI for 3.00 ct. diamonds declined by 2.7 percent during the quarter.
While prices are stable, trading is quiet. India’s jewelry trade has been negatively impacted by the 2 percent tax on diamond imports, which has resulted in tighter credit to the industry. Global demand, however, has been spurred by rising consumer sentiment in the Far East and U.S. Rough demand has improved, especially from Indian buyers, and prices strengthened in March while rough supply remains restrained.
According to the just released Rapaport Research Report, “Slow Yet Steady,” jewelry retail inventories have declined but buyers remain hesitant to replenish their diamond stocks in a large-scale significant way. There is rising demand for fancy shape diamonds. Consumers continue to shift toward smaller, lower quality diamonds at more affordable price points. Trading is expected to remain cautious in the second quarter while market conditions are projected to improve in the same slow but steady manner as they did in the first quarter.