Diamond prices expected to continue to rise

said Rio Tinto in its Diamonds Annual Review released recently.

Given that new mine discoveries are increasingly rare and demand is ramping up, "even in the most optimistic supply scenario, there is a sizeable supply gap," said the producer of about 20 percent of the world's diamonds by value.

The company expects China, India and the Middle East to "contribute significantly" to future diamond demand. "As urban incomes increase, diamond jewellery demand is expected to track luxury goods consumption," in those markets, it said.

However, it added that the US will remain the main driver of demand in overall value terms. "Despite the current poor economic conditions in the US, slow but steady growth is expected over the longer term. The value and volume of US retail diamond jewellery demand is expected to grow in line with GDP."