Global Economics Have Good Implications for Diamond Investors

Rare Investment Report - The colored diamond industry is feeling the undercurrent of shifting global economics, as countries such as India and China exercise their purchasing power. Rare Investment shows that natural fancy colored diamonds are becoming even more valuable as China and India’s demand for diamond jewellery is expected to increase 6% every year.

Rare Investment experts show that diamond producers are having difficulty in securing new supplies. Only about 1 percent of kimberlite pipes discovered to date have been economically viable. The time to invest is now!

Rare Investment has been warning investors for years that high demand and low supply is causing a serious diamond shortage and now other industry experts are saying the same thing. Most recent reports show that demand for diamonds and diamond jewellery from China and India will more than double the market over the next decade and that we will see a 6% growth every year.

In an interview with Reuter’s reporter Clara Ferreira-Marques, Bain and Company Management Consulting Firm explain that world-wide demand for diamonds from emerging markets is causing the depletion of the world’s diamond supply and the lack of new mines is causing rare diamonds to become even rarer (Dec. 6, 2011).

The company reported “[Diamonds are] set to hold up prices even through periods of volatility and could be supported by additional demand for diamonds as investment” (Reuters, Dec. 6, 2011).

Bains and Company note that an increase in transparency has made more and more savvy investors attracted to investing in individual, rare polished gems and natural fancy colored diamonds.

Serious Shortages of Supplies

“The supply-demand picture is cheering to producers, but some are already fretting that the difficulties in securing new supply  [only about 1 percent of kimberlite pipes discovered to date have been economically viable] could make the price of diamonds too high, forcing consumers to look at alternatives” (Reuters, Dec. 6, 2011).

Diamond prices are dictated by supply and demand. High demand and low to no supply for natural fancy colored diamonds is a structural market condition that cannot be altered in the foreseeable future. The impact that this will have on the high-net-worth individuals (HNWI) is minimal, as they are less price sensitive, however other diamond consumers will feel the pinch.

 “Consumer appetite for diamonds...will boom...driven by increased prosperity in China and India. Demand is set to grow at an annual rate of 6.4 percent to nearly 250 million carats and 6.6 percent in value terms by 2020” (Reuters, December 2011).

What does all this information mean to investors...?

The time to invest in natural fancy colored diamonds is now.