Gold prices are holding steady near the $4,000 per ounce level, with market participants noting that the surge in bullion values has not yet triggered a significant substitution effect in the diamond jewellery sector.
Industry observers point to sustained demand for diamond pieces, indicating that high gold prices are not deterring consumers from purchasing other precious stone jewellery.
However, the recent dip below the $4,000 per ounce level for the first time since November has introduced technical uncertainty, prompting traders to monitor support levels closely.
Aarav Bafna, Director of Akoirah by Augmont, highlighted that festive buying trends remain robust for diamonds, even as gold reaches historic highs.
The resilience of diamond demand suggests that the two asset classes are currently operating in parallel consumer segments rather than competing directly for discretionary spending.
This dynamic is particularly relevant as gold futures recently surged past the $4,000 mark before slipping below the threshold, marking a period of high volatility in the precious metals market.
The stability in diamond demand comes after gold experienced a sharp slide in the previous session, only to recover decisively on Thursday.
The rebound was supported by a retreat in the US dollar index, which provided a tailwind for non-yielding assets.
However, the recent dip below the $4,000 per ounce level for the first time since November has introduced technical uncertainty, prompting traders to monitor support levels closely.