Diamond prices will rise by an average of 6 percent annually through to 2020 due to constrained supply not being able to meet rising demand from China and India, according to BMO Capital Markets analyst Edward Sterck.

A new report from Bain & Co. predicts that sales of jewelry and watches in the U.S. market will increase about 4 percent a year between now and 2105, reaching $75 to $80 billion as diamond sales recover along with the rest of the industry.

Prices of round polished diamond diamonds dropped in July, dragging down the IDEX Online Global Polished Diamond Price index to 136.6, a 6.9 percent year-over-year decline. This is the first year-over-year decline in more than two years.

In 2011, production declined 3.4 percent, but rough prices leaped 26.5 percent. This staggering price increase was not reflected with a similar increase in polished prices, which were up 17 percent in 2011. The need for lower rough prices is clear.

Rapaport reported more drops in diamond prices this week, this time in smaller goods, where prices were down 13 percent in the second quarter.

Prices are down for polished diamonds of all sizes due to sluggish demand in the Far East, issues in India and overall concern about the state of the world economy, the half-year report from Rapaport shows. Demand in the United States, however, is described as steady.

Diamond traders at the June Hong Kong Jewellery and Gem Fair reported strong pressure on prices, especially for 2+ carat rounds. Princess- and cushion-cut goods were in rising demand.

The rough diamond sector is in trouble. Not only the low demand, high costs, increasing inventories, weak polished prices or low liquidity testify to this. People are also pessimistic.

IndexIQ, a New York based investment firm, has filed with the Securities and Exchange Commission to register IQ Physical Diamond Trust, an exchange traded fund backed by diamonds.

Jewelers of America has announced a partnership with the International Diamond Exchange, and will now offer its members the latest diamond pricing information and a subscription to the weekly IDEX Diamond Price Report free of charge.

After tumbling from highs realized in June, rough diamond prices have stabilized and are expected to remain at or near their current level in the coming months, London-based mining company Petra Diamonds said in a recent trading update.

Certified polished diamond prices increased in 2011, with strong buying in the first half of last year enough to offset a soft second half, the RapNet Diamond Index for 2011 shows.

Polished diamond prices rose by a solid 17 percent during 2011, according to the IDEX Online Polished Diamond Price Index.

Diamond mining company Petra Diamonds sold a 4.8-carat blue diamond for $1.45 million, equivalent to over $300,000 per carat.

Polished diamond prices softened in November as the wholesale sector of the pipeline sought a steady footing during the first half of the 2011 holiday season. The average asking price of polished diamonds was 0.2 percent lower in November than in October, according to the IDEX Online Polished Diamond Index.

Both rough and polished diamond prices have risen in Mumbai. Rough prices have gone up by 8-10 percent, while polished prices have firmed up 2-5 percent.

The market is in a recovery mode with traders once again buying and manufacturing rough goods and having positive expectations for the holiday season. In practical terms, there is some trade in rough in the secondary market again, but prices are based on a new, and lower, standard.

Global polished diamond prices slipped in October for the third consecutive month but showed some vitality near the end of the month, according to the IDEX Online Global Polished Diamond Price Index.

Global diamond prices are on a slow decline, according to the IDEX Online Polished Diamond Index. The Index closed at 1039.9 on Monday, settling below 140 for the first time since June 18.

IDEX Online announced it is launching a diamond price report for round and fancy-cut diamonds up to 5.99 carats in size.

The average price of diamonds is slowly settling down after peaking in late July. The soft decline comes after a wild uphill race and while traders feel unsure about the upcoming Hong Kong trade fair.