the Basel III banking regulations (effective January 2013) and the use of
gold as Tier 1 capital for bank holdings. "People have been talking about
gold being an alternate currency or a reserve currency, etc. for some
time […] but the gold market is so small that it can never be an effective
reserve currency. It can be used in a minor sense, but it won't play a large
role because it's too tight and too small a market," he said. "Still, nothing
prevents it from being legislated as an acceptable Tier 1 reserve. If it is,
then the price will be very elastic to any sort of demand."
DIAMONDS
The diamond market is dominated by Africa, which accounts for around
65% of the market. Canada, Russia and Australia are major producers as
well. The market has two trajectories: diamonds used in luxury goods,
such as jewellery, and diamonds for industrial applications, such as cutting or drilling.
Prices were dented in 2012. For example, certified polished diamond
prices dipped across October, according to the Rapaport Group, which monitors and tracks the global diamond market. Trade specific to China and India
has been notably muted, with economic and political uncertainty weighing
on the market, it added. But there is hope, especially among those trading in
the diamond market for jewellery, that Q4 will mark a rebound in sentiment.
Whether this can be maintained into 2013 is too early to tell.
Meanwhile, Reuters noted on November 5 that Antwerp – the historic
centre for the diamond market, with almost 85% of the world's uncut diamonds traded – is starting to face stiffer competition from other bourses in
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