Market Comment

News:

India sentiment weak due to slow US imports. US domestic trade better as jewelers buy locally. Major retailers have yet to place holiday orders. Signs of stabilization in China retail: Luk Fook FY 1Q retail sales of diamond jewelry +4% YOY, with same-store sales decline easing to 17%; Chow Tai Fook fiscal 1Q retail sales -1.9% YOY. Swatch Group (Omega, Harry Winston) reports slight improvement in China and drop in retailers’ inventories even as 1H global watch and jewelry sales -13% YOY to $3.6B. De Beers 2Q consolidated sales +14% YOY to $1.2B, production -36% to 4.1M cts.; “stock rebalancing initiatives” supporting sales volume. Botswana reportedly seeking full control of De Beers.

Fancies:

Long fancy shapes such as Oval, Marquise and Emerald doing better than rounds in 2 ct. and larger. High-quality Marquises, long Radiants and long Cushions in short supply. Long Cushions easy to sell and trading at 20% to 25% premium over square ones. Solid US interest in elongated Ovals of good shape and quality in D-I, VS-SI categories. Oval and Pear, 0.30 to 0.49 ct., F-I, VS diamonds in demand. Ovals 5% to 10% more expensive than Pears in US market. Very well-cut fancy shapes difficult to find and commanding premiums. Fancies with bad proportions illiquid.