Diamond trading was cautious in October as demand softened, according to Rapaport. Dealers lacked the urgency to buy, anticipating further price drops. The Jewish holidays and India’s Diwali festival also slowed business, it noted. US jewellers remain optimistic for the upcoming holiday season despite high inflation and economic declines.
The RapNet Diamond Index (RAPI™) for 1-carat diamonds slid 3.6% in October and has fallen 6.5% since the beginning of the year.
| RapNet Diamond Index (RAPI™) | |||
| October | Year to date Jan. 1 to Nov. 1 | Year on year Nov. 1, 2021, to Nov. 1, 2022 | |
| RAPI 0.30 ct. | -2.8% | -8.5% | -6.9% |
| RAPI 0.50 ct. | -3.6% | -8.7% | -7.1% |
| RAPI 1 ct. | -3.6% | -6.5% | 0.6% |
| RAPI 3 ct. | -1.5% | 0.9% | 11.1% |
Rapaport said that polished inventory remains high. The volume of diamonds on RapNet has hit record levels above 1.8 million stones. Manufacturers refrained from rough buying ahead of Diwali, which began 24th October, and factories have closed for two to three weeks for the festival. De Beers eased purchasing terms at its 31st October sight by allowing sightholders to sell back 20% of their rough allocations above 1 carat instead of the usual 10%. Petra Diamonds also noted weakness in 1- to 5-carat goods.
Restraint in the rough market reflects caution in polished, where stones below 0.18 carat are selling better than 1 carat and larger. Indian suppliers raised discounts of certified diamonds to bolster sales and raise liquidity before Diwali, but dealers were afraid to do business while prices continued to decline, Rapaport said.
China and Hong Kong are showing signs of improvement after their respective governments eased Covid-19 restrictions, it pointed out. The US is supporting the industry with demand for bridal and high-end jewellery. Some retailers have been enticing buyers with promotions since early holiday shopping began in October. Consumers are seeking deals as inflation, rising interest rates and the volatile stock market squeeze discretionary spending, it noted.
There are mixed expectations for the holiday season. Economic uncertainty, the Ukraine war, the China slowdown and growth in lab-grown diamonds are affecting sentiment. However, brands are increasing investment in marketing, with Tiffany & Co., De Beers and the Natural Diamond Council hoping to boost peak season sales via partnerships with high-profile ambassadors Beyoncé, Lupita Nyong’o and Lily James, respectively.