Mumbai: Diamond prices softened slightly in July due to a seasonal slowdown as US wholesalers closed for their summer vacations. Bargain-hunters were asking for higher discounts during the quiet period, but suppliers had little urgency to sell after a positive first half.
The RapNet Diamond Index (RAPI™) for 1-carat diamonds slid 0.4% in July, but remains up 3% since the beginning of the year. The index has increased 0.8% in the past 12 months.
US dealers have now returned from vacation, but are finding it difficult to replace goods they sold during the second quarter when prices strengthened.
Manufacturers are keeping polished prices relatively firm as they defend high rough prices, which increased an estimated 4% in the first half of 2018. Lower rough supply is also supporting prices, with both De Beers' and Alrosa's sales volumes declining 7% year on year during the six-month period.
Polished inventory is consequently lower, with the number of diamonds listed on RapNet down 3% from a year ago to 1.4 million stones on August 1.
While last year saw strong demand for smaller diamonds following India's demonetization program, activity has shifted back to GIA dossiers, which are selling well. There are consistent orders from the US and China for 0.50-carat, D to G, VS to SI diamonds, and rising interest in 0.70-carat, G to J, VS to SI after an extended weak period. Small stones are moving slowly.
The depreciation of currencies in China and India is reducing the budgets of local dealers and causing a shift in demand to lower qualities. Still, Hong Kong jewelers have maintained steady growth, which has raised expectations for the September Hong Kong show and the October 1 Golden Week retail season. The US and China continue to support the market and boost optimism for the second half, despite trade tensions.
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