Diamonds Update

Gold, trading at its highest price since 1988, shows no sign of retreating as production fails to keep pace with jewelry demand and investors buy bullion for a hedge against inflation, a Bloomberg survey showed.

Thirty-four of 49 traders, investors and analysts surveyed Sept. 15 and Sept. 16 from Seoul to New York advised buying gold, which last week reached $464 an ounce, the highest since June 1988. Eight respondents recommended selling the metal, and seven were neutral.

Supply from mines and recyclers will fall short of demand this year by 14 percent, or 459 metric tons, up from a deficit of 35 tons last year, Citigroup Inc. said Sept. 15. Gold prices are up 14 percent in the past year as jewelry demand soared in India, China and Turkey, and the record-high cost of oil sparked concern inflation will accelerate.

Read the rest of the story at http://www.bloomberg.com/apps/news?pid=10000081&sid=aAXNplh1FTR8&refer=australia