Diamond sparkles as gold sheen dims

Prices up by 40 per cent in Bangalore as supply dips and demand rises
Last Updated 11 May 2014, 19:16 IST

Diamond prices have shot up in the City by almost 40 per cent to 50 per cent. One carat of small stones which used to cost around Rs 40,000 is now selling at about Rs 70,000 to Rs 75,000.

The prices of big stone carats have gone up from Rs 8 lakh to Rs 12 lakh, up by 30 per cent. The sharp rise is because of lower supplies and higher demand in the City, reflecting the churn in the diamond market.

Consumers are now seeing diamond as an investment option, especially as gold prices are dipping.
Typically, Bangaloreans buy, on an average, 20 to 30 cents of diamond which may have several small stones. The very rich buy a 100-cent carat made of a single stone, known as the Solitaire.

There is fairly high demand for both small and big stones. The single stone is highly sought after, followed by the demand for two or three stone diamonds, but supplies aren’t keeping pace with demand, D V Ramesh of the Bangalore Jewellers’ Association told Deccan Herald. The short supply is being attributed, apart from market factors, to the increasing rarity of diamonds - diamond mines are no longer producing very high quantity nor are new mines being discovered. The global supply is likely to dip, impacting national and local markets.

The immediate reason for people to look at diamond as an investment option has been the moderate performance of the gold market. Gold prices in the Mumbai market, for instance, fell from Rs 33,000 per 10 gm to around Rs 30,000. Investment priorities change immediately to diamond, said to be the closest competitor to gold. Consumer assessment sees diamond as more valuable than gold, because it can sell at a higher price later.

An ASSOCHAM survey nationwide has shown that nearly 76 per cent of the jewellers are focusing on platinum-based diamond jewellery over the traditional gold and silver jewellery to tap the changing preferences of domestic consumers. According to the survey, platinum-based diamond jewellery is picking up pace in India and the diamond-studded platinum jewellery has more demand compared to diamond-studded gold jewellery in metros.

The survey reveals that domestic consumers are looking at platinum and diamond jewellery. The frequent price fluctuations in gold and silver may have caused the shift towards platinum and diamond-based jewellery, it says.

The demand for diamond jewellery has been growing by over 25 per cent last year and in 2014. There is also an equal growth in the high-end diamond jewellery. While investing in gold and silver has been going on for years, platinum and diamond are now becoming mainstream investment options.

Back in 2010, National Mining Development Corporation, the country’s largest iron ore miner, and De Beers, the world’s largest diamond producer, had found traces of diamond deposits in Odisha, Andhra Pradesh and Karnataka. In Karnataka, traces were found in Gulbarga. No developments have been recorded thereafter.

Glory of Koh-i-Noor

The Koh-i-Noor (“Mountain of Light”) is the most popular diamond from India. The Koh-i-Noor was mined in Andhra Pradesh in India together with its double, the Darya-ye-Noor (the “Sea of Light”). The diamond has belonged to many dynasties like Rajputs, Mughals, Afsharid, Durrani Empires, the Sikh Empire and the British.

In 1849, the diamond was confiscated from the Sikh Empire by the British East India Company and became part of the British Crown Jewels when Queen Victoria was proclaimed Empress of India in 1877. The diamond was traditionally known as “Kuh-e-nur” in the 19th century after the British conquest of India. It is currently set into the Crown of Queen Elizabeth and is on display at the Tower of London.

Diamond mines in India are at: Golkonda, Kollur Mine, Panna and Bunder Project.

(Published 11 May 2014, 19:15 IST)

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