After dwindling diamond prices and reduced demand for rough diamonds and diamond jewelry in 2008 and 2009, these precious gemstones are making a steady comeback, in the opinion of www.diamondpriceguide.com. In fact, the portal says, as we ring in 2010, the diamond market is looking like an increasingly promising option for investors.

According to reports, investors are already snapping up diamonds as hard assets in order to hedge their portfolios in 2010 against potential diminution of the dollar value, and many investment consultants are recommending diamonds as 'must have' assets for a secure investment portfolio.

Both De Beers and Harry Winston, the two largest diamond producers in the world, have reported that their business is recovering and predicted a steady increase in diamond prices over the next few months, an announcement which certainly did its part to attract investors to the field.

Diamond investments plunged in 2009 and lenders showed reticence, in particular regarding the Antwerp diamond industry, whose trade was reduced to a mere one-tenth of the typical levels. The drop off in the luxury market took a serious toll on the diamond market in 2009.

In an effort to combat this hostile effect and increase demand for diamonds, a number of the leading diamond producers joined forces to establish the International Diamond Board (IDB), whose task is the generic promotion of diamonds around the world by boosting consumer confidence in diamonds. As a result of many factors, diamond demand is recuperating.

In the past, arguments against investing in diamonds stemmed from the fact that there was no universal price market to measure diamond prices. However, the World Federation of Diamond Bourses endorsement of IDEX's recommended diamond retail price list in 2009 made investing in diamonds more convenient by establishing a set diamond price marker.

Since many of the existing diamond mines in Africa and elsewhere are nearly exhausted of their assets, and considering the increasing demand for diamonds, demand is expected to outstrip supply in the medium term. Most diamond mines in Africa have already passed their peak productivity points, and not many promising new mines have been unearthed lately. This is in part because the credit crunch curtailed diamond exploration activity over the past two years. This means increasing diamond prices and the possibility of reaping a significant profit for diamond investors.

According to investment analysts, diamond prices are expected to rise as soon as 2010. Forecasts show that an increasing demand will come from the revitalized Western market as the economy stabilizes and begins to flourish, as well as from new markets in China and India, where diamonds are the latest consumer commodity. For jewelers and retailers in the diamond market, this means that it is crucial to stay abreast of diamond prices via the Rapaport price list and the IDEX price list, in order to be constantly up to date with potentially rapidly changing diamond prices.

While diamond supply may be limited, a recent survey revealed that consumers were increasingly interested in purchasing man-made diamonds as an alternative to mined diamonds – mostly as a result of the controversial and corrupt mining practices and proliferation of blood diamonds, which still have not been eradicated despite strict regulations.