(MENAFN- ProactiveInvestors)Commodities Diamonds and precious stones Two key points this week in the D&PS space. Firstly traders have been looking towards the important Hong Kong Gem and Jewellery fair for clues to demand trends throughout Asia in the next few months... the conclusion Not as bad as many perceive. Certainly when compared to equity investors' perceptions of commodities anyway. Festival season kicks off with Golden Week next week. Demand is likely to be ok but as the name would suggest much like the trends seen last year the focus is set to remain on the yellow metal in the main. Tentative signs of inventory clearing in some categories becoming evident with some shortages appearing. Secondly De Beers published an update to their Diamond Insight report. In my opinion this is always a good read and worth chopping a few trees to have a copy on the train to read. DB says 2014 global production fell 3% to 142M ct which was slightly out of line with KP numbers. However the commentary behind diamond jewellery demand increasing 3% to $80bn is interesting as are the comments on the potential in India. Oh and our friends Lucapa continue to recover large diamonds at Lulo. Currently picking out specials at a rate of 1 every 1.2 days... no wonder the stock is flying like a kite in a hurricane this week. Precious metals Gold continues to respond in line with our thoughts. Rate rises pushed out to the right EM fears scaring the life out of commodity investors and concerns over short term growth after the weak durable goods numbers on Thursday. The yellow metal is up over 5% following the non-rate rise decision last week and a little bit more than that since we questioned the consensus. I see no reason to change the view that gold exposure remains a decent bet at these troubled times. Physical markets remain will supported with Indian demand at its highest level since 2012. We are now moving into the festival season. As reminder Indian demand tends to be from predominantly rural areas (c60% of total) where most depend on farming. Finally it seems as if the update on the discovery of a train load of Nazi gold has been... ahem delayed. This week: Gold: +1% Silver: (0.5%) Platinum: (3%) Palladium: +7% - Shortage fears despite VW's efforts to hoodwink the world. The Passat is not a good car. Rhodium: (2%). Base metals: Commentators remain fixated on the red metal this week because that is the only thing Glencore produces obviously. Oh and China is broken. BTW Diamonds are about 15% (ish). The US remains around 40%. This week: Aluminium: (2%) Copper: (3%) Lead: +0.6% Nickel: +2.5% Tin: +0.5% Zinc: (1%). Company announcements/news/meetings: Gemfields (LON:GEM) Buy (PT: 75p) Update on the Kagem resource this week. "Following the recent publication of resource at Montepuez Gemfields today publishes an update to its Kagem Emerald Mine in Zambia. We believe that despite a quiet FY2014 there remains significant potential for value enhancement. We reiterate our Buy recommendation and 75p price target derived from a blended average of NPV/EPS." Note available upon request Petra Diamonds (LON:PDL) Buy (PT: 135p) Al Rajhi stake sold. "We believe the long anticipated placing of over 26m shares commonly known as the Al Rajhi stake removes a significant negative force that has driven Petra to multi-month lows. As such we now believe that Petra offers investors a positive trading opportunity despite the well acknowledged concerns over pricing in the rough diamond market. We update our recommendations following a change in analyst coverage to Buy with a new 135p price target (from 144p) derived from a blended average of NAV/EPS" Note available upon request Firestone Diamonds (LON:FDI) Hold Firestone announced this week that has now satisfied all of the outstanding conditions required to drawdown on the $82.4 million project finance with Absa Bank Limited. Utilising $7.6 million form its first drawdown. FDI also confirm it has drawn $20 million of the $30 million available in the Eurobond facility provided by Pacific Road and RCF. The company is set to hold a Capital Markets Day on the 6th October. I will be front and centre.
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