SURAT, India (Commodity Online): Look who is benefiting from the high gold prices! Diamond units in India’s Surat city are cashing in on the opportunity given by the soaring prices of goid.

Spiraling prices of gold, GenNext’s love for precious stones, growing risks in other investment options and inventory control since last year’s recession helped the diamond cutting and polishing industry in Surat.

Several of the diamond processing units, nearly 4,500 of which had closed down around Diwali in 2008 during the peak of global meltdown, have reopened during last few months.

Around 3,000 of the units which closed down in last year’s recession have reopened just before Diwali.

Turn-around in the diamond trade has been caused by multiple factors since last year’s crisis when more than a lakh workers were sent home to Saurashtra due to lack of work for all of them.

The cut in production level since 2008 Diwali had brought down the inventory of finished products which had created a demand-supply equilibrium in the trade.

Besides, the demand for finished diamond is growing in domestic market too as younger generation is buying diamond ornaments instead of gold. The content of gold in diamond jewellery is negligible which makes it affordable.

Demand for diamond workers is rising gradually as the cutting and polishing units which had laid off so many people last year are re-opening gradually.

Demand for finished diamonds has started going up in the US, UK and Japan despite the recession being still on.

Indians who have burnt their fingers in real estate and share market are now buying diamonds as an investment option after gold prices have shot through the roof.

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