Jul 8, 2011 9:11am GMT
Original Source: Reuters

Diamond prices bounce back 40 pct, tempt investors

MILAN (Reuters) – Diamond prices are now above pre-crisis levels after a 35 to 40 percent rise so far this year, helped by increased scarcity and an emerging role as an investment, the executive director of jeweller De Beers said.

"Diamonds are more scarce than before the crisis. And there are three markets where demand is very strong: China, India and the United States," said Stephen Lussier in an interview in Friday's Il Sole 24 Ore.

"The U.S. still represents 40 percent of global demand," he said, adding that Americans had rediscovered diamonds as a form of diversification investment.

"As an investment, diamonds are more similar to art. You need to know what you're buying," Lussier said. However, unlike gold, 99.5 percent of diamonds still end up in jewellery, he added.
Unlisted De Beers, the world's largest diamond producer, is 45 percent owned by global miner Anglo American.

Lussier said De Beers' diamond production, which had fallen during the financial crisis, has increased by 10 to 15 percent this year and the group will run at full capacity by 2012.
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