BMO: Diamond Prices to Rise 6 Percent a Year to 2020

Bloomberg reported that the price of diamonds will rise 6 percent per year until 2020 as output fails to meet increased demand from China and India, according to BMO Capital Markets.

As quoted in the market news:

‘The primary constraint on supply growth is the lack of new discoveries that match the scale of existing operations in Botswana and Russia,’ Sterck said. ‘Given expanding demand and constrained supply, diamond prices are likely to increase as consumers compete for an increasingly scarce commodity.’

Rough diamond prices, up about 9 percent this year, will stay at current levels for the rest of 2013 before beginning to increase next year, BMO said. Prices fell 16 percent last year after three straight gains of more than 20 percent, according to data compiled by WWW International Diamond Consultants Ltd.

Click here to read the full Bloomberg report.