With annual incomes rising as much as 18 per cent, India and China, the two fastest-growing diamond markets, are leading the charge in helping both diamond prices and the shares of junior mining companies recover, says this report. Reporting from the ground in India, I can vouch for the fact that consumer demand for jewellery is really roaring and the entire gem and jewellery industry is coming together in a spirit of great optimism for the India International Jewellery Show (IIJS), which begins on August 30 in Mumbai.

At a meeting a couple of days ago, of all the agencies involved in the IIJS, the software team announced that 17,000 people had already pre-registered for the show and that 1,500 visitors were coming as members of overseas delegations from 10 different countries. The Thai commerce is leading his country’s delegation to the show. India and Thailand now have a free-trade agreement in place and trade between the two countries – especially in gems and jewellery – has risen sharply. The local diamond market has witnessed a spurt in the movement of polished goods thanks to demand for IIJS fabrication. There’s a feeling of anticipation all around.

The big Indian holiday sales season is over Diwali and a host of other festivals close to it. The buzz in the Indian jewellery market is that this year, Diwali looks like being good one in terms of sales.

But what’s really heartening is to read this report by Ken Gassman, an industry analyst I respect, maintaining that despite the sub-prime mortage meltdown and overall credit market fears, jewellery demand in the US will rise 4.4 per cent over 2006 levels! Ken does note, however, that there is a modest risk of US consumer spending faltering. The biggest risk is energy. Analysts are warning that any spike in oil prices could effectively squelch consumer demand.

Overall though, I would say I’ve come around to cautious optimism.