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Market Comments 9/15/2011

Sep 15, 2011 6:00 PM  
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Hong Kong show may be better than expected. Strong Far East demand could result in higher trading volume as Indian suppliers adjust prices to meet their liquidity needs. Buyer’s market anticipated. U.S. retail sales stall in August as consumers cut spending amid growing economic turmoil. Rough buyers restrained as Firestone Diamonds reports weak demand for small stones at September tender. Petra Diamonds takes over Finsch mine. Swatch ends Tiffany partnership to develop watch brand.

Global Markets

United States: Polished demand is quiet but stable as dealers are trading in lower volumes than they did a year ago. The summer break is proving to be longer than usual as wholesalers and retailers are cautiously planning their Christmas inventories. Jewelry retail demand is stable, driven by the bridal sector, but trending toward lower price point items. 

Belgium: There is some uncertainty in the market as polished dealers continue to struggle with prices. As a result, trading is relatively quiet and many expect next week’s Hong Kong Gem & Jewellery Fair to be a surer barometer of some price stability. There is some polished demand emanating from the Far East as well as from Europe and the U.S., particularly for 0.30-carat to 2.00-carat, F-H, VS-SI goods. There are some shortages reported in the VS-SI category stones. Rough trading remains slow and cautious.

Trading remains cautious as dealers and manufacturers are preparing, and waiting, for the Hong Kong show. Expectations for the show are relatively low despite the strong Israeli contingent participating in the event. While demand is stable, with many enquiries for goods as dealers seek out price levels, buying is limited to filling orders rather than making projections with large-volume purchases. Demand is focused on 0.30-carat to 0.70 carat and 1-carat to 1.5-carat, I+, VS-SI, triple Ex goods.

India: Local polished demand improved slightly from last week, particularly for small-size goods. Still, trading remains cautious due to price differentials and volatile currency and equity markets. There is a strong focus on next week’s Hong Kong show, which many are hoping will provide a clearer indication about price and demand trends. Indian dealers are hoping that strong demand from Chinese buyers will ensure steady activity at the show. The rough market remains slow and limited as price uncertainties persist. Tight liquidity continues to impact market sentiment and trading.

China: There has been cautious buying as retailers prepare for the coming National Day Golden Week festival, which starts on October 1. Buyers are looking for a clearer guideline regarding prices and are hoping the Hong Kong show will provide that. There is a sense that retailer’s inventories are relatively high after the strong growth period of the first half of the year spurred their buying activity. Diamond dealing at the Shenzhen show, which began September 14, was limited as the event is more focused on jewelry trading.   

Hong Kong: Traders have been busy preparing for next week’s show even as expectations for the event are slightly subdued. There is lingering concern about the global economy and the impact that slow European and U.S. growth will have on the ar East region. Dealers are also concerned about unstable prices ahead of the show and are hoping for stability. There is good demand for larger stones above 3 carats, while demand for smaller goods appears relatively slow.

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