Okay, this is pure speculation, but hear my arguments out. David Noko, the managing director of De Beers South Africa might well have been making an absolutely routine observation about the market. But honestly, it’s been my experience that every time somebody from De Beers says the ‘market looks good and we expect prices to rise’, it usually means that the mining behemoth is sharpening the knife to stick the industry with a rough diamond price hike.

The thing is, market analysts including Ken Gassman, whom I respect immensely, have reported that polished diamond prices have been rising through September. Given that the holiday season, by far the biggest jewellery sales period of the year, falls in the final quarter of the year, it is almost a no-brainer to say that polished prices will continue to rise over the final quarter of the year. But read Ken’s piece carefully. He says that though demand has been strong, it is not as robust as in previous months, reflecting consumer uncertainty about the economic outlook in the US. More importantly, he also says that one of the driving factors in the rising prices of polished diamonds has been the mining-company-driven rise in rough diamond prices which the cutting and polishing industry has managed to pass on.

In response to an email from me, Ken said that he expects holiday sales this year to be between 4% and 4.5% higher than last year – but most of this due to increased sticker prices and not due to higher sales volumes. He also says that the US job market is not strong and his holiday forecast factors it in as negative.

Other analysts and economists are saying that the probability of a full-blown recession in the United States in 2008 has grown also grown tremendously. Even the highly respected Alan Greenspan thinks the writing on the wall doesn’t look good.

I haven’t heard any worried warnings from the De Beers. But then, I’ve never heard them ever say the situation looks bad. And if you ask the Indian market, they’ll tell you that the overall economic situation has never deterred the diamond miner from hiking prices before. Also, if you’ll pardon my cynicism (I can’t help it, I’m soaking it up from the market here), given the situation, if you were a mining company and were unable to hike prices for some time now, the final quarter of this year is probably the last window of opportunity to stick the market with a price rise.