Is it too late to get a good deal on a big diamond????

Harry Winston Says Diamonds to Rise After Crisis (Update2)

By Christopher Donville and Ron Day

Sept. 30 (Bloomberg) -- Demand for safe-haven investments and a dearth of significant new mines will lift diamond prices after the world's financial markets stabilize, Harry Winston Diamond Corp. Chief Executive Officer Robert Gannicott said.

Global supplies of rough diamonds are unlikely to meet expected demand as purchases rise with wealth in Russia, the Middle East and elsewhere in Asia.

``There's a lot more upside in diamond prices than the public market appreciates,'' Gannicott said yesterday in an interview in New York. ``I don't think the supply-demand gap is understood very well.''

Gannicott, 61, is positioning Toronto-based Harry Winston to benefit from heightened price competition for diamonds. Since early 2007, the price of some 3-carat diamonds have risen fourfold on speculation demand would outstrip supply.

``If you bought good quality stones five years ago, you're looking at a much bigger win than anything in the stock market,'' Gannicott said.

Harry Winston rose 98 cents, or 7.5 percent, to C$14 at 4:19 p.m. in Toronto Stock Exchange trading. The shares have fallen 57 percent this year.

Harry Winston, which owns its namesake chain of 18 luxury jewelry stores and 40 percent of the Diavik mine in Canada, plans to buy or tie up with another diamond producer within three years to ensure access to supplies of rough diamonds, Gannicott said.

Increased Exploration

Harry Winston and its Diavik partner, Rio Tinto Group of London, also are increasing spending on diamond exploration by 20 percent on lands they jointly control near the mine.

``Rough diamond supply is likely to fall short of expected demand within the next three to five years,'' London-based RBC Capital Markets analyst Des Kilalea said in an Aug. 27 note to clients. ``Production growth will be limited as older mines become deeper and production is scaled back, while new production is not expected to fill the gap.''

A slow regulatory process in some countries will delay the startup of new mines, Gannicott said. Significant new diamond discoveries will probably await development of the industry's next ``magic wand,'' or some breakthrough technology that improves the odds of explorers finding diamonds, said Gannicott, a geologist by training.

Cultural Reasons

On the demand side, Gannicott said he expects sales to rise in China, India, the Middle East and Russia, partly for cultural reasons that are not well understood in Western countries. As sales in the U.S. have slowed, women in Russia and the Middle East have been increasing purchases of diamonds as security against the possibility of divorce, he said.

``The ladies that become owners of these things don't have the benefit of divorce laws that we're used to,'' said Gannicott. ``The ownership of a very expensive piece of jewelry that is clearly theirs and is clearly portable means a lot more than it would in our society.''

Comments

[Val Rie]

It is never too late to get a good deal... you just need to research where to go. Happy to help if you need it :-)

[ash]

r u interested in selling this blog.? if so how much

[liz goud]

whether the price of diamonds stays the same or increase to unreasonable rates, diamond jewelries will remain the top favorite when it comes to engagement and wedding rings. as they say, diamonds are a girl's best friend and best friends stay forever!

[Mike Diamond]

Diamond prices will go up with time, good news for those in the wedding business?