Speculative pricing could harm growing demand for diamonds

Soaring demand for high quality diamonds has pushed prices to world-record highs, but investments in these precious stones could backfire if the current economic meltdown forces speculators to inundate the market. The prices of rare, polished diamonds have peaked in recent months following surging global economic growth and compounded by the rapid fall of the dollar.

Rapid growth of emerging economies such as the Gulf States, China and India has multiplied the number of multi-millionaires and other High Net Worth Individuals (HNWI), many of whom are willing to pay top dollar for high-end jewellery and rare gemstones. This view was also shared by Varda Shine, Managing Director of De Beers Diamond Trading Company (DTC), its London-based distribution & sales arm who opined that diamonds would be more and more sought after.