The diamond market is notoriously opaque and whilst information is becoming more readily available (De Beers have promised for example to disclose the total value of stones sold at each sight from this year) getting a clear picture of where rough diamond prices are right now let alone where they may be headed remains a challenge.

What I am struck by right now is the discrepancy between:

The share prices of listed jewellers Chow Tai Fook (HKG:1929), Luk Fook (HKG:0590) and Tiffany (NYSE:TIF) down a further 18%, 12% and 6% in the last month respectively….

Polished diamond prices – down a further 3% in December according to polishedprices.com (albeit recognising Rapaport has a different view)…

And the share prices of listed diamond companies, with Petra up 47% in the last month, Dominion Diamonds +29% and Gem Diamonds +25%.

Does this mean the share prices of listed diamond companies are a leading indicator of a more positive diamond market? Will back test that later. In the mean time have sold half of my holding in Gem Diamonds (2,500 shares at 125p per share) realising a 23% profit. For the long term, I think GEMD still offers value, but with De Beers expected to reduce prices at the January sight there could be some negative noise to come nearer term in the diamond market.

Pleased to see the Contrarian Miner portfolio up 1% since I last posted on 23 December to £93,072 despite the FTSE 350 Mining index down 6% over the same period.

The portfolio’s performance has been helped by a 25% jump in micro-cap Keras Resources (on no particular news) as well as strong performances from Nordgold (+9%), Amara (+8%) and Lonmin (+6%). Bit of luck really.