Diamond prices are set to rise in 2008, according to James Allan of the South African-based principal of finance group Allan Hochreiter driving by American baby Boomers spending more money on luxury items.

In Perth last week at the 2007 Paydirt World Diamond Conference James Allen stated, “”The US accounts for about 43 per cent of the world’s $72 billion annual diamond retail sales market,”

“We have seen spikes in the number of Americans taking cruises and buying Harley Davidsons — but diamonds are right up there and that is what is driving world demand.”

Mr Allan also predicted that diamond prices will increase by up to 10 per cent during the coming year. An equivalent rise from about $US9 to $US99 per carat at current production prices.

“In China, about 40 per cent of Chinese women are now getting married with diamond rings and that trend is expected to increase significantly over the coming years,” he indicated with India being another rapidly strengthening sector, he added.

Tawana Resources managing director Wolf Marx, said that many companies have turned their attention back to Africa in the race to find the next big diamond discovery while John Armstrong, the senior geologist at Canadian diamond explorer Stornoway Diamond Corp, commented that diamonds were experiencing “a perfect storm” caused by falling supply and rising demand.

Together with the shortfall in supply and no major world-class discovery for close to 15 years and couples with coupled with major mines such as Argyle in Australia approaching their end of life it looks like we could see another five years of strong rising diamond prices.â�?�

This entry was posted on Monday, October 29th, 2007 at 3:02 pm.