Diamond jewellry are displaced in a shop window. [CFP]
Global diamond prices increased by an average of 30 percent in the first quarter of the year, reaching the prediction for the entire growth for 2011 made by Debeers, the largest diamond provider in the world, in January.
Market expectation and rising labor costs were the main reasons behind the rise, analysts said, although they added it would have a minor impact on consumer purchases of small diamonds in China.
"The price quoted for finished diamonds hit its highest point so far this year on March 11," said Fan Qinfen, operations director of 21gem, the largest diamond pricing consultancy in China.
"Chinese investors are particularly driven to buy when they see prices rising, on the expectation of long-term increases," he said. "We suggested buying diamonds as an investment in May 2009. The price has continued increasing ever since.
"Overall, it's a price rebound following the financial crisis. In fact, the average diamond price has only recovered 90 percent of its record high period in June 2008. There's still space for prices to rise."
Debeers also said in it's January report that it expected diamond prices to double over the next three years.
However, Fan said that diamonds of under 1 carat will not be impacted greatly by the rising prices. "For some low-end half-carat diamond rings, the price is about $1,500, only up by around $150. For 1 carat rings of fair quality, the price is about the same as that of 2007 and 2008, around $8,000 to $9,000," Fan said.
