IDEX Online Research: Polished Prices Head Down in 2012, 1 Ct -7%

(IDEX Online News) – The IDEX Online Polished Diamond Price Index closed 2012 at 134.7, down from 139.2 on January 1 as overall diamond prices declined during the year. However in December prices headed up, increasing 1.8 percent from November.

The full analysis of the polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members here.

Compared to November, December had a solid gain, but year-over-year prices are down 3.5 percent. The decline is large, but compared to previous months, the gap is closing, as the following graph shows. The IDEX Online Polished Diamond Price Index averaged 134.3 in December.

The all important 1-carat rounds, representing more than 12 percent of the market by value, increased by 2.2 percent month-over-month, the first such increase since February 2012 and the largest month to month gain since July 2011, at the peak of the bubble. However, caraters lost a sizable 7.0 percent year-over-year in December.

Seems confusing? No wonder. The trend to notice is the long-term one. In the first quarter of 2011, prices were low. They then accelerated wildly, peaking in July 2011 only to slide ever since.

Though the slide was steep in the third quarter of 2011, it moderated in the first half of 2012, falling again during the summer. It has just recently, since late November, reversed its course, showing a moderate upward trend.

Outlook

The recent gains may give reason for optimism, but caution is required. The holiday season demand always leads to price increases. The overall trend however shows a slowdown in the fall and a reversal of course. If consumers have any sense of confidence in the economic future, demand will rebound and prices will respond with increases.

The full analysis of the polished diamond prices is available to IDEX Online Research subscribers and IDEX Online members here. Click here for more information on how to subscribe or become a member.