Retail diamond prices in the second half of 2008 experienced one of the largest decreases in decades and followed by relatively no price changes up or down in 2009. However, rough diamond prices in 2009 were up by about 15% and they have increased that much already in 2010. As a result, there is significant pressure on polished diamond prices to move upward.
With the U.S. economy beginning to recover and the U.S. consumers typically purchasing about half the world’s diamonds and diamond jewelry, retail prices are moving upward. The economies of other diamond-consuming countries are also showing signs of recovery so the global demand for polished diamonds is expected to rise in 2010.
At the end of January 2010, there was an industry wide price increase for diamonds over 3.0 carat weight with price increases ranging from 1.5% to 3.5% depending on carat weight, color and clarity. In mid-February, another industry wide price increase occurred for round diamonds in the 1.00 to 1.99 carat range with at least H color and VS2 clarity and had increases in the 1.0% to 5.0% range depending on carat weight, color, and clarity.
It is only a matter of time before we see price increases for fancy (everything but round) shaped diamonds under 3.0 carats and for round diamonds in the 2.0 to 2.99 carat weight range.
These early year increases will not be the last increases as projections are for polished diamond prices to rise by double-digits for 2010. For diamond shoppers, this means that the best prices are going to be had now rather than later this year or in the foreseeable future. Of course, the lesson we have learned in the past two years is that projections for global economies are anything but certain.