RapNet’s average certified polished diamond asking prices
increased 3.4 percent over the month of February, according to the
recently released Rapaport Research Report Positive Polished; Raging Rough. 

According to the report, the prices of certified polished
diamonds were driven by strong dealer demand in India, Belgium and
Israel, and
continued growth of retail demand in China. U.S. retail sales maintained
their
uptrend but wholesalers are still afraid to increase inventory levels.
The
polished market continues to lag behind the rough market and cutting
profit
margins remain tight.

Half carats were up 2.5 percent, 1 carats were up 4.2
percent, and 3 carats were up 4.5 percent. Auctions continued to strengthen during the month.
Average
prices on RapNet were 11.3 percent above levels seen at the end of
February
2010.

High rough prices are being driven by strong Indian demand
while mining companies continue to constrain supply. De Beers Diamond
Trading
Company prices rose by an estimated average 7 percent in February, while
prices
at rough tenders increased by about 7 percent to 10 percent. Premiums in the
secondary
market remain in the high single digits despite the price hikes and
demand
remains strong.

While diamond trading is upbeat and dealers may be tempted
to exploit current price trends, geopolitical and macroeconomic factors
may
still have a negative impact on the market. The trade is advised to
avoid
speculation and maintain caution.

According to the IDEX
Online
Polished Diamond Price Index, prices of polished diamonds increased in February 1.5
percent compared to January and 8.5 percent year-over-year.

According to the index, average prices are now just 4 percent short of their record
level in August 2008. Prices of 1-carat, 4-carat and 5-carat goods rose on average
more than 2 percent in February compared to January. Year-over-year, 3
carat
goods climbed the most, 24 percent on average.

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