China downturn impacting diamond market: Dealer

The market pressure felt in China in the first quarter of the year, as well as in Russia, has "definitely" impacted the European jewelry market, the co-founder of 77 Diamonds told CNBC.

"Globally what we've seen is that although diamonds have outperformed a lot of other commodity asset classes, the performance within the European market has been relatively stable and demand has dropped and prices have been a bit subdued," Tobias Kormind said.

This contrasts with the steady rise the diamond market has seen in the past decade, he told CNBC, where "white diamonds have performed at 50 percent returns and more rare elements like colored diamonds, they're up 160 percent. "

Colored diamonds – including yellow, red, pink and blue ones, are "so incredibly rare - you can compare them to rare paintings from the great masters," said Kormind, explaining that there are only approximately 100 certified red diamonds in the world.

"Because of the rarity, the larger the stones are, the color, there is a just a growing demand among wealthy investors to find lots of different asset classes which are unique- and they're running out," said the diamond specialist.

Blue diamonds are also very rare, according to Kormind. "There's a limited supply and it's reducing so you see a lot of stones coming out of collections now as well because there's just not enough coming out of the ground, the same with pinks."

And with limited supply outstripping demand, Kormind just sees interest in the diamond market continuing to grow from wealthy investors.

"The equation looks really strong and really good," he told CNBC.

Mark Evans | Getty Images

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