Polished diamond prices in October gave back some of their gains for the year, as prices declined slightly ahead of India's Diwali festival, when polishing factories close for the month of November. This according to figures from Rapaport's RapNet Diamond Index (RAPI). Rapaport says inventory levels have risen but sentiment has not been dented as expectations for the US holiday season are positive.
"The RapNet Diamond Index (RAPI™) for 1-carat diamonds fell 0.9% in October," according to a press release. "The index was up 1.3% since the beginning of the year and 0.7% from a year ago, following strong gains in the first half of 2018." Each of the other major categories experienced declines in October as well, with 0.30ct losing -1.4% (+ 3.3% YTD, +4.5% y-o-y), 0.50ct losing -0.5% (+4.1% YTD, +4.4% y-o-y) and 3ct falling -1.0% further (-1% YTD, -2.4% y-o-y).
"Diamond trading was steady during the month, with US holiday orders driving sales. Buyers were looking for bargains in India, where local dealers and manufacturers have been under pressure due to the weak rupee - down 13% since January 1 - and tighter bank lending." The big story recently, however, is in the smaller goods, of which Indian manufacturers are holding many. For months now, diamond producers have seen the trade volumes as well as prices of smaller goods decline, while their average sales prices have increased, as demand for larger goods has remained firm. Trade in smaller goods has been hit by several issues: in addition to the week rupee, which increases manufacturers' cost of acquiring goods, the news of synthetic diamonds entering the lower end of the market has created uncertainty. However, Rapaport writes, "Preparations for the US holiday season are supporting polished trading. US retailers are optimistic for the season, as consumer confidence continues to rise. Jewelers require less in-store inventory and are taking more goods on memo; their focus is now on improving their omni-channel offerings, with online sales expected to spike."