Oct. 24 (Bloomberg) -- RBC Capital Markets lowered its diamond price forecast by 10 percent for the next two years with Christmas sales in the U.S. expected to be ``disappointing.''

More than 50 percent of all diamond jewelry sales in the U.S. take place between Thanksgiving Day and Valentine's Day, ``so the peak sales season is about to kick off when consumers are most gloomy,'' RBC Capital Markets wrote in a note today. The brokerage lowered its diamond price forecast for the year ending June 2009 and next.

Commodity prices are sliding as a global financial crisis deepens an economic slump in the U.S., which accounts for about half of diamond retail sales. Confidence among U.S. buyers of luxury goods fell to the lowest level in at least four years, researcher Unity Marketing said last week.

De Beers, the world's biggest supplier of rough diamonds, said on Oct. 21 it will reassess output in 2009 should the global economy tip into recession. A day earlier, ZAO Alrosa, Russia's diamond monopoly, said it will cut supplies of rough gems immediately to support prices and may reduce supplies by as much as 30 percent.

RBC also said in the note to clients that it reduced its target price for Petra Diamonds Ltd., a producer of gems in Africa, to 1.07 pounds ($1.65) a share from 1.60 pounds.

``Diamond prices will remain under pressure for at least the next 12 months,'' according to the brokerage.

To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net

Last Updated: October 24, 2008 07:01 EDT