However, analysts say the aspiring middle class especially people in the 20-50 age group is looking at diamonds as an alternative to the now out-of-reach gold, which saw its price scale new highs over the last six months. According to the World Gold Council, the price of gold has doubled in the last few years. In 2008, the price of gold was $26.90 per gram, which went up to $35.60 in 2009 and $44.50 in 2010. In 2011, gold reached its peak level of $ 53.50.
With the rise in disposable incomes, customers are willing to spend on diamonds, which look better compared to the heavy and expensive gold ornaments, said Mehul Choksi, chairman and MD, Gitanjali.
Diamond players at either end of the chain production and retailing are also gaining access to financing without difficulty. According to Tanishqs
luxury diamond brand Zoya, there is a 50% increase in sales of their diamonds. Arif Saleem Padiath, business manager, Zoya, told FE: We are targeting a 50% growth in our sales as customers look for innovative designs and are ready to spend due to high disposable incomes. Diamonds are also available at different prices depend upon their quality type.
Rahul Vira, brand head of Gili, which saw a 40-50% rise in diamond sales this year, said, Apart from the rise in gold prices, one of the factors to buy diamonds is the resale value of diamonds, which is around 85% of the total purchasing value.
De Beers, which controls nearly 40% of the worlds rough supplies, had cut its output in 2009 and restored it in 2010. In 2011, diamond prices (per carat) were $25,000 against $24,500 in 2010, $23,000 in 2009 and $23,500 in 2008.