Diamonds to Outpace Gold on Asia Spending
By Soraya Permatasari and Rajesh Kumar Singh - Dec 28, 2011 7:55 AM
Diamond prices are poised to rise for the next four years, outpacing gold, as increased spending on luxury goods in China, India and the Middle East outpaces supplies of the precious stone, analysts said.
Average prices for rough, or uncut, diamonds will probably climb 9 percent to $145 a carat next year, 1.4 percent in 2013 and 4.8 percent in 2014, according to Edward Sterck, an analyst at BMO Capital Markets. They may gain 2.6 percent in 2015 and 3.2 percent in 2016, he said. Gold will drop for three years starting 2013, following a 19 percent gain in 2012, according to the median of seven analyst estimates compiled by Bloomberg.
Demand for diamonds may grow at double the pace of supply through 2020 because of an expanding middle class in China and India, Bain & Co. said this month in a report that didn’t give price forecasts. The two countries, and the Middle East, will account for 40 percent of global diamond consumption by 2015, up from about 8 percent in 2005, according to Anglo American Plc (AAL), which controls De Beers, the world’s largest diamond miner.
“We expect emerging nations, first and foremost India and China, to drive demand for diamonds in the upcoming years, while consumption among developed nations is likely to moderate,” said Vladimir Sergievskiy, an analyst at Moscow-based Finam Investment. “On the supply side, the commissioning of new mines should be largely offset by depletion of mature ones.”
more:
http://www.bloomberg.com/news/2011-12-27/diamonds-set-to-outpace-gold-as-luxury-spending-in-asia-rises-commodities.html
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