they may not be an investor’s absolute best friend right now but diamonds should at least be in that ballpark that’s according to research from bank of america which has lifted its 2022 forecast for prices of the gem by 15 the rationale is similar to that of many other commodities these days tight supply and strong demand equals higher prices behind that is another set of familiar causes —russia china and inflation sanctions on alrosa rualrs russia’s key state diamond miner is making it tougher for those supplies to reach the west while china’s zerocovid policy has hit luxury spending in its major cities however bank of america says the us is making up about 50 of global demand for diamonds right now and according to analysts led by jason fairclough diamond prices have historically “outpaced” inflation with higher prices specifically bullish for diamonds as “steeper costs mean higher marginal cost  higher price expectations” the supply of diamonds is now the lowest since the great financial crisis of 2008 “we see the fundamentals remaining pricesupportive short term we expect global supply to peak at 114 million carats in 2023” which is still under 2017 production levels said fairclough and the team they cited one index for rough diamond prices by polishedpricescom as further support for their diamond outlook it’s up 80 from a september 2020 low among the dominant companies operating in this space for the bank they updated ukbased petra dimaonds to buy pdl and lifted their price target to 170 pence from 110 pence ukbased gem diamonds gemd and canada’s lucara diamond luc are also buy rated and while bank of america believes asia will remain in the lead for diamond demand who knew that the us had such a thirst for jewels “a key driver is a lack of substitutes for luxury spend among consumers with tourism unlikely to rebound to precovid levels in fy22 amid ongoing travel restrictions consequently we think diamond demand will remain buoyant this appears to be coming through at auctions with strong diamond tender prices reported by key players recently” said fairclough and the team