Prices for investment diamonds continued their upward price movement during May, rising a further five percent, according to research by the diamond investment house Fusion Alternatives.

This marks the fifth consecutive month of price gains. Since the beginning of the year prices have increased 15 percent.

The encouraging aspect of the price rise is that it is now being more driven by solid pull-through demand from the world's major diamond consuming markets, say Fusion Alternatives.

This is as opposed to a lack of inventory in the diamond pipeline caused by the major producers reducing their output - as was the case earlier this year.

According to the research, global collectors and buyers have clearly accepted the higher asking prices and are now actively buying at these higher prices.

Diamonds are forever... and their values are on the up, judging by recent auction sales

At the upper end of the market prices remain extremely strong - as evidenced by the prices fetched at the Christie's jewel sale in Hong Kong at the beginning of the month.

Eight-nine percent of the lots on offer were sold generating $60.4 million in sales.

Seven diamond items were sold for more than $1m each including a pair of fancy deep blue heart-shaped and large white pear shaped diamond earrings which sold for $4.4m and a brilliant 13.67 carat E color internally flawless diamond which sold for $1.74 million.

"Notwithstanding the overall buoyant sentiment of polished diamond market we are witnessing the re-emergence of some speculative trading activity, albeit at limited and sustainable levels," said a statement by Fusion Alternatives.

"We are keeping our eyes on this week's De Beers' DTC sight in London to ascertain the effect the rise in demand and prices for polished goods will have upstream on the rough diamond markets."  

Fusion Alternatives is an investment house and an alternative investment asset manager specialising in investment diamonds.

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