There has been much frenzy in the diamond market. In the first half of 2011, the 1 to 2 carat prices were up by about 34%, ½ carat by about 37% and for sizes above 3 carat, an increase of about 32%. Overall the market saw an average price increase of 32% in January to June 2011.
The prices have been fuelled by exceptionally strong demand from the Far East and India coupled with the retailers from the USA market replenishing their inventory after a strong Thanksgiving and X’mas season in December 2010.
With the decrease in the value of the US Dollar, many investors are turning to commodities, hence pushing the demand for good quality diamonds further upwards. This currency factor has similarly contributed to the escalating prices of other collectibles.
The increase in the prices of rough diamonds has translated into pressure on diamond-cutting margins. Indeed June saw an increase of 12% in the better quality rough diamond prices. And hence, further pressure on these margins is anticipated.
Given that the demand for the rough remains strong, the outlook is that the prices will continue on an uptrend although there are efforts in the industry to avoid an overheating and instead to try to lead the market to more gradual increase in prices.
On jewellery, the latest trend is long chains in the form of pearls, coloured gemstones, diamonds or a combination. Jewellery in the form of diamond or coloured gemstone classics with a stylish twist is always in strong demand, given the timelessness in these pieces.
At Suen Jewellers, many customers have developed a discerning eye to be able to independently see the difference in the cutting quality of diamonds and the standards of craftsmanship. This has led to greater appreciation of what we can offer and hence, a continued pressure on our part to maintain outstanding standards.