Diamond to Keep Dropping 30% Within One Year

According to the statistical data, not only staple commodity led by crude oil slump, but diamonds can't escape this kind of fate over the past years. Diamond prices have dropped by as much as 29% over the past year, whose main reason is that China's demand for diamonds falls sharply.

According to the data of international diamond trade institution-Rapaport Group, 1 carat diamond prices fell by 0.9%, and 0.3-carat diamond prices fell 1.7% in August. Over the past 12 months, 1 carat diamond price has fallen 12.9%, and 0.3-carat diamond has fallen 29%.

Rapaport says in monthly report: "The polished diamond prices continue to fall in August. Traders are reluctant to increase inventory, and buyers are waiting for a lower price. The decline of stock market further cause the market downturn. As the wealth of shareholders of listed companies devalues, the outlook of luxury goods has turned pale."

Rapaport says China's economy has slowed down, and precious gifts are banned between officials, and RMB depreciation will be the impact of optional spending.

Jewelry investors may not be so lucky this year, because jewelry prices fell with cobalt metals and commodities. Over the past 12 months, the gold fell by 11%, silver dropping 24%, and platinum dropping 29%.

According to Reuters report, since June, in Surat-the land of diamond, 5000 diamond polishers have lost their jobs, and the city has five or six large diamond companies fail.

The second quarter earnings of Tiffany & Co. is far below expectations. Luxury retailers are also beginning to decline in the United States. Because of the dollar, its sales have fallen 7% worldwide.

The world's leading diamond manufacturer- De Beers released the earnings in the first half of 2015, which shows that the turnover of $3 billion has fallen 21% on year-on-year basis, and the turnover is $3.8 billion over the same period last year.

Because diamond prices plunged, the Republic of Botswana that owns about 15% share in De Beers, has adjusted its growth forecast for 2015 from the 4.9% forecasted in February, down to 2.6% in August of this year.