2012 looks to be good year to invest in diamonds

The market analysts believe that diamond prices will rise in the next four years, being primarily driven by the strong demand for luxury goods in China, India and Middle East.

Bloomberg analysts predict that the average price of rough diamonds will likely rise 9% to $145 a carat next year, 1.4% in 2013 and 4.8% in 2014.

Since many major market analysts believe that the prices of gold will start to decline with the start of 2013 buying diamonds seems to be the next logical step for major investors, especially as there is an expanding middle class in China and India.

The Middle East diamond market also seems to be expanding. Diamonds were for instance together with gold the most traded non oil goods in United Arab Emirates in 2011, with Emirate traders importing $1.11 billion worth of diamonds through July 2011.

Emerging nations continue to drive the demand for diamonds, both rough and polished. According to the Rapaport Diamond Trade Index the prices of high-quality diamonds have increased 23% in 2011, the highest gain in the last five years, and they are expected to grow even further in 2012.

China and India are expected to account for more than 40% of global diamond demand by 2015. Asian diamond market will grow at a rapid pace, giving investors an almost a safe bet to make profits.