Market Comment

News: Market slow but stable. Polished production rising, with India Feb. rough imports at 11-month high of $1.6B (-6% YOY), polished exports $1.7B (-28% YOY). Rapaport sends letter to OFAC requesting exemptions for polished diamonds in the US and all polished diamonds in existence before March 1, 2024. There should not be sanctions for polished diamonds that do not result in additional funding to Russia. Botswana warns that G7 sanctions might harm its diamond industry. US Federal Reserve holds interest rates at 5.25% to 5.5% after 3.2% inflation in Feb. Signet shares -12% in one day amid soft 1Q guidance; fiscal 4Q sales $2.5B (-6% YOY), profit $626M (+126%). Brilliant Earth 4Q sales $124M (+4% YOY).

Fancies: High inventories of Ovals and Pears due to slow sales and imbalance between supply and demand after Indian manufacturers shifted from rounds to fancies last year. Cutters now returning to rounds. Sellers are flexible on prices. Downtrend continues. Weakest size is 0.70 ct. category. Sales of Hearts, Princesses and square Cushions low. Longer Ovals, Pears, Radiants and Cushions bringing higher prices. Goods with medium and short ratios harder to sell. Supply shortages supporting prices for Marquises. Well-cut stones hard to find and commanding premiums. Oversizes trading at higher prices than usual. Off-make, poorly cut fancies illiquid.