Prices of just mined diamonds are going down steadily. Petra Diamonds, a British diamond mining company operating diamond mines in South Africa reported that rough diamond prices dropped by about nine percent during the last six months of 2014. They report that the price of diamond carat dropped from $152 six months ago to $130 at the end of the year. Will this translate into lowering the price of diamond jewelry? Experts are not sure.
One big reason is starving diamond cutters. Rough diamonds are sold to those who are cutting and polishing diamonds. They like to turn around rough diamond to a finish product as soon as possible to free up their capital. Not only that their source of funding are drying up. In late 2014, Belgium based Antwerp Diamond Bank was closed and it was a major funding source for diamond cutters and polishers.
Similar to crude prices, falling rough diamond prices takes longer to translate into lower prices for diamond jewelry. Many jewelers are seeing an increased demand for other colored stones reducing the demand for diamonds. Slowing global economy is also partly to blame for less demand for diamonds. Another reason is some avoiding diamonds due to fear of blood diamonds.