Explosive growth in demand for engagement rings in China is helping to drive prices up.
Demand for diamonds is growing in the U.S. and the emerging world.
FORTUNE — Gold has lost its luster — at least as an investment. Since hitting $1,900 an ounce in the summer of 2011, the price of the shiny metal has plunged some 30%. That fall has prompted an exodus from gold-backed ETFs. But now investors are setting their sights on another precious material: diamonds.
Excitement has been building in recent months around the potential of diamonds to become a veritable asset class for the first time. Unlike gold, the gems currently have no spot price or conventional market besides jewelers and pawn shops. The renowned emerging markets investor Mark Mobius recently told MarketWatch that he has visited pawn resellers to get a firsthand view of the market for diamonds, which he believes are on the cusp of a boom, and which may eventually be available to investors via funds.
Diamond demand has increased in the U.S., too
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