A new BMO report predicts diamond prices will increase an average of 6% per year between 2014 and 2020 based on growing demand in China and India, according to Bloomberg.

The industry is unlikely to surpass its 2007 peak around 160 million carats because new discoveries have not matched the scale of mines in Botswana and Russia.

Many of the largest gemstone mines have outputs which are falling as diamonds near the surface are depleted. The Diavik operation in Canada's Northwest Territories was the last major mine to start about 10 years ago.

Supplies are tightening as consumers are purchasing more.

Buyers in China and India account for about 20% of global purchasing. By 2016, they will make up 28% when the market will be worth $31 billion. This year so far rough diamond prices are up 9% which is expected to remain constant until 2014 when they will start the 6% rise.