Editor’s Note
The recent conflict between Hamas and Israel has heightened market uncertainty, driving investors toward traditional safe havens like gold. This article explores the potential ripple effects on commodity markets, including diamonds, where supply concerns could emerge given Israel’s significant role in the global polished diamond trade.
The Palestinian armed group Hamas attacked Israel last Saturday (7th), prompting the Israeli government to declare a state of war. This has triggered investors to move funds into safe-haven assets such as gold. While oil and gold prices have risen, diamonds may also see price increases due to supply concerns.
Jewish people have a tradition of working in the diamond cutting industry. Israel is one of the world’s three major polished diamond centers, and its diamond processing industry is among the most advanced globally. According to 2010 statistics, by value, 9% of polished diamonds were processed in the country.
Furthermore, data from Diamond Bank shows that over 50% of the world’s rough diamonds are processed and traded in Israel. The Israel Diamond Exchange (IDE), founded in 1937, is one of the world’s largest and most advanced diamond centers. The exchange has approximately 3,000 members engaged in the production, import, export, and marketing of rough and polished diamonds.