Futuro Markets Predicts Robust Diamond Sales In The Next Five Years

Sparkling future of Diamond Industry backed up by new reports

London (I-Newswire) March 15, 2013 - The global diamond industry is expected to do well in the next five years as sales of diamonds reach a new high, according to value based company specializing in precious stones, Futuro Markets. This positive claim is backed up by new reports, “Analyzing the Global Diamond Industry”, by Market and Research and “The Global Diamond Industry: Portrait of Growth” by Bain and Company which revealed an industry sales growth of 18% in 2010. Powered by a strong demand, sales of diamonds surpassed their pre-crisis peak in 2011, making them as resilient as the overall luxury category.

The US, the world's largest diamond jewellery market, posted a 7% gain in sales as the country's economy rebounded, with a 1.7% increase in 2011 GDP while European sales of diamond jewellery fell slightly from 2010 to 2011. De Beers announced plans to decrease output to between 28 million and 30 million carats cut of 5% to 10% compared with 2011. Rio Tinto expects to post growth based on the performance of the first nine months of 2012, because of a 17% increase in output from the Argyle mine and a 5% increase from the Diavik mine. ALROSA is expected to maintain current production levels.

Futuro Markets, a London based company offering a creative option also added, “there has also been an increase in the number of high net-worth clients (especially in China and India) looking to buy fancy coloured diamonds as both an investment and as a status symbol.” Diamonds are considered an emerging hedge for wealth protection, with increasing popularity for smaller buyers too. The final major development seen is the continued interest in developing investment vehicles focused on diamonds. Despite a weak global economy, the diamond market has held up with strong prices, even as other assets have declined or moved sideways.

Recent Financial Times report pointed out that a new wave of diamond hedge funds are now looking to overtake precious metals as the preferred ‘safe haven’ investment during an economic downturn. And experts agree. Peter Laib, chairman of Swiss group, Diamond Asset Advisors, commented: “After the subprime disaster and with economic uncertainty, investors are looking for low-volatility investments. Diamonds are less volatile, as they’re resistant to speculation by the financial community, so there are no derivatives or tradeable products and no short selling is possible”. In addition, according to research this year by Barclays Wealth, the world’s millionaires are devoting an average of 9.6 per cent of their fortunes to non-financial assets such as collectables.

Bain and Company’s report strengthened Futuro Markets’ claim of a sparkling future for diamonds as it projected world demand to grow at an average annual rate of 5.9% each year, to nearly $26 billion (in 2011 prices) by 2020 with India and China accounting for 50% of incremental demand. It also predicted the global supply of rough diamonds to grow by an average annual rate of 2.7% starting in 2012 to nearly 157 million carats in 2020.

For more information on diamond investing, visit www.futuro-markets.com