Expected Rise In Diamond Prices

Published on 11/10/11

With diamonds fast becoming best friends to growing numbers of luxury lovers in China and India, industry experts are setting up funds to help investors benefit from rising demand and prices for the stones.

After launching a first fund in May, diamond miner and retailer Harry Winston Corp is considering a follow-up with its partner Diamond Asset Advisors (DAA). Martin Rapaport, whose diamond price list is an industry benchmark, is also working on a fund project for next year.

"I think that over the long term there will be a strong appreciation of diamond prices based on increasing luxury demand from India, China and the Pacific Rim," said industry expert Rapaport, adding that a weak dollar would also increase diamonds' appeal as a safe-haven for investors.

Broader demand and a consequent improvement in liquidity should support diamond prices over the longer term, making such funds attractive, although the horizon is cloudy in the near term, some market watchers said.