For Immediate Release

Polished Prices Up 10% in 2010 Rapaport Issues a Special Report: Diamond Markets in Recovery Mode- www..net/report

PRESS RELEASE, January 19, 2011, New York : The diamond markets have recovered in 2010 as significant increases in consumer demand from India, China and Far East markets, as well as a relatively healthy U.S. holiday season supported higher prices. Liberal U.S. monetary policies have encouraged global consumption and stimulated the market for inexpensive diamonds. They have also created currency uncertainty, inflationary expectations and surging gold prices that have encouraged investment demand for diamonds. Overall polished diamond prices and trading volumes have returned to early 2008 pre-recession levels and stabilized during the second half of 2010.

Certified polished diamonds prices increased 10.3% on RapNet - Rapaport Diamond Trading Network, with half carats up 4.1%, one carats up 12.3% and three carats up 24.6%, large very expensive high quality diamonds did even better as did small, inexpensive diamonds whose prices increased 57% at Rapaport Auctions.

The globalization of diamond demand and the supply side management of rough diamonds by Russia’s ALROSA and significantly influenced diamond prices throughout the year. In some instances stockpiling and restrictive production created shortages that resulted in speculative pricing and reduced manufacturer profits. With over 600,000 cutters, India now dominates diamond production assisted by easy banking credit and a powerful local jewelry market that is growing at about 25% per annum. “While the U.S. recovery will take time the global diamond markets are well positioned for growth in 2011. Western governments will continue liberal monetary policies providing short term artificial stimulation that promotes global consumption. In the medium term we expect near zero interest rates to result in an inflationary cycle that will create unprecedented currency uncertainty and support demand for diamonds as a store of value. We caution that markets will be volatile and that interest rates will eventually surge as governments fight inflation and these higher interest rates may have a very negative impact on diamond demand and pricing. The trade is advised to enjoy the ride as long as interest rates remain low, avoid speculation and maintain liquidity” said Martin Rapaport, Chairman of the Rapaport Group.

To download the Special Report: Diamond Markets in Recovery Mode go to: www.diamonds.net/report To receive a copy directly to your inbox please email: [email protected]

About the Rapaport Group: The Rapaport Group is an international network of companies providing added value services that support the development of free, fair and competitive global diamond markets. Established in 1978, the Rapaport Diamond Report is the primary source of diamond prices and market information. Group activities include publishing, research and marketing services, internet information and diamond trading networks, global rough and polished diamond tenders, diamond certification, quality- control, compliance, shipping, and financial services. Major activities of the group include the development of markets for Diamonds and Jewelry as well as the creation of diamond futures markets. Additional information is available at www.Rapaport.com .

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