Ramat-Gan - Prices of polished diamonds increased dramatically in February, rising 1.5 percent compared to January and 8.5 percent year-over-year, according to the IDEX Online Polished Diamond Price Index. The rise brought average prices to 4 percent short of their record level in August 2008.

Emphasizing a mixture of optimism and retailers willingness to yield to wholesalers’ pressure, the average price increased by about 2.9 percent between February 1 and February 28, the sharpest price increase since the recovery cycle began nearly a year ago.

At the end of February, the IDEX Online Polished Price Index stood at 124.5. The Index peaked at a record 128.9 during August 2008, just as the global economy was about to drop into a major recession.

Several factors drove the price increases: Continued pressure by manufacturers to increase polished prices to maintain their margins have finally succeeded; a need to finally renew inventories after the decent holiday season; growth in emerging markets--mostly China; continually rising rough diamond prices; and the upcoming Hong Kong trade show, for which expectations are high.

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. Other large items were not lagging far behind, with prices of five-caraters growing 16 percent, four-caraters adding 14 percent to their price and 1-carat goods increasing by 10 percent.

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