Diamonds are a “great investment”
The bulls are running rampant in the diamond market. Overall, demand grew by 8% in 2004, and De Beers, which controls 60% of the global market, has pushed through two price increases this year.
The bulls are running rampant in the diamond market. Overall, demand grew by 8% in 2004, and De Beers, which controls 60% of the global market, has pushed through two price increases this year which have had no impact on demand.
No wonder: the status-conscious middle classes in China and India are becoming increasingly wealthy and buying more sparklers, while supply is "falling further and further behind demand", says Wolfgang Drechsler in Handelsblatt. In the 1990s, supply outstripped demand by up to 140% and De Beers built up huge stockpiles, but these have been largely depleted. And miners, deterred from investing in new capacity by the long bear market, will have trouble catching up it takes up to ten years for a new mine to start producing.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
