Rapaport Weekly Market Comment

Rising expectations for holiday season as Conference
Board’s US consumer confidence index hits 18-year high in October. Steady US
demand for 1 ct., G-J, VS-SI, RapSpec A3+ diamonds, but polished prices
softening amid India liquidity concerns. 1 ct. RAPI -0.9% in October. Rough
market quiet, with factories closing for next week’s Diwali festival. Jewelers
reducing in-store inventory, using technology to tap into suppliers’ stock and
improve the customer experience. Letšeng mine 3Q average price -1% to
$1,841/ct. Alrosa joins De Beers Tracr blockchain. Petra Diamonds appoints
Varda Shine to board. The Rapaport Group wishes all our friends a happy,
enlightening Diwali.

Fancies: Far
East demand improving as Chinese consumers seek fancy shapes at better prices.
US and European demand mixed. Ovals and Cushions are best sellers, followed by
Emeralds and Pears. Radiants improving. Marquises and Princesses weak.
Oversizes selling well. Steady demand for fine-quality 6 to 10 ct. Ovals, Pears
and Emeralds, with prices firming for 3 to 5 ct. due to shortages. US
supporting market for commercial-quality, medium-priced fancies under 1 ct.
Off-make, poorly cut fancies illiquid and hard to sell, even at very deep
discounts.

United States: Polished trading improves as holiday season approaches.
Dealers focused on 0.70 to 1.50 ct., G-J, SI-I1, RapSpec A3+ diamonds. Buyers
looking for bargains as India factories close in November. Jewelers avoiding
unnecessary inventory and taking more goods on memo. Focus on fashion jewelry
for the season, while bridal market
remains stable.

Belgium: Mixed mood, with suppliers to the US
doing well. Fewer Indian buyers in Antwerp due to upcoming Diwali holiday and
tight liquidity in Mumbai market. Stable demand for 1 ct., F-J, VS-SI, RapSpec
A3+ diamonds. Uncertified piqué goods improving. Rough trading quiet.

India: Cautious sentiment amid several
bankruptcy rumors. Polished trading steady as dealers fill orders before the
November 7 Diwali break. Consistent demand for SI-I1 clarities in all
categories. Chinese buyers drive improvement in melee. Sales-and-distribution
offices closing for one week over Diwali, and smaller Surat factories shutting
for three-to-four weeks.

Israel: Steady activity, with dealers
focused on filling US orders. Traders looking for buying opportunities in India
before Diwali. Stable demand for 0.30 to 0.50 ct., D-J, VS, but prices under
pressure due to oversupply. Melee being squeezed by shift to high-quality CVD.
Fine-cut fancy shapes selling well.

Hong Kong: Slight improvement in trading.
Steady demand for 0.30 to 0.70 ct., D-G, VVS-VS goods. 1 to 1.50 ct., G-K,
VS-SI also moving well, but bigger sizes slower. Dealers discounting old
stock to stimulate sales. Traders optimistic for November peak season, despite
concerns over impact of US-China trade war on consumer spending.