Commodity Online predicts that due to the improved global economic environment and demand outstripping supply for investment diamonds in the medium term, diamond prices will probably rise in 2010 and return to their natural growth rate of 12 to 16% in the medium term.
In 2009, diamond prices remained stable despite the economic crisis. Commodity Online notes that after declining by some 25% during the last quarter of 2008 and the first quarter of 2009, prices for investment diamonds stabilized during the second quarter of the year and remained stable throughout the second half of the year, completing the year at an only 10% decline.
In 2009, the stabilization in diamond prices despite the constrained trading environment stemmed from the decision of major diamond producers to limit the quantity of goods coming into the diamond pipeline.
In addition to the inherent stabilization mechanism within the diamond industry, increasing demand from emerging diamond consuming markets such as China, India, the Gulf and Turkey, as well as continued growth in Internet sales, helped to sustain global diamond prices.
By: Rachel Lieberman, Israel Diamond Industry Portal
