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UK Wealth Manager Cashes In On Hunger For Gold, Diamonds

Tom Burroughes, Group Editor, London, 10 June 2011

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Tapping into what it sees as investor demand for “real
assets” such as precious metals as inflation fears hold sway, UK-based wealth
manager London & Capital has launched a bespoke diamond and gold investment
service.

The service is offered in close partnership with Wolf
Rabstein of Max Rabstein & Son, at a time when diamonds and gold, for
example, have already risen rapidly amid heavy falls in major currencies such
as the dollar, concerns about inflation, and geopolitical tensions. More
positively, rising affluence in emerging economies such as India has also driven
demand. Investment diamonds rose about 20 per cent in price in 2010 (source:
Fusion Alternatives). Gold, meanwhile, is currently trading around $1,500 per
ounce, having risen about 24 per cent in the past year to almost $1,580 before
retreating slightly (source: Bloomberg).

London & Capital explained that under the precious
metals side of the programme, £25,000, (around $40,921) for example, buys around
100 22-carat sovereign coins, each weighing about 0.235 troy ounces and at a
cost of about £245. The buyer obtains a tube of 25 coins and the investor can
take personal delivery of the coins or to have them stored securely in Max
Rabstein & Son’s Hatton
Garden vault. Among other
features, investors can hold gold bars, London & Capital said in a
statement.

As for diamonds, a sum of £25,000 buys several pure
one-carat cut, G/H colour, quality diamonds. 
All stones are sealed individually in micro-film and placed within a
display box, with an official certificate presented on the day of purchase
confirming that the diamonds have been legally sourced. As diamonds are taxed at
20 per cent under valued added tax when brought in to the UK, investors can store diamonds in Max Rabstein
& Son’s Antwerp
vaults.

London & Capital has timed the launch of the Precious
Assets Investment Programme to coincide with London Jewellery Week, an annual
event which runs from 6 to 12 June.

“Gold is a safe haven in a world of competitive currency
debasement and sovereign debt uncertainties, and remains in the clearest of
primary uptrends, rising 25 per cent last year. 
It has continued its rise in 2011, its potential as a hedge against
inflation and against the US dollar fuelling its popularity.  Diamonds meanwhile have proven not just a
girl’s best friend but a highly attractive long-term investment,” said Iain
Tait, partner at L&C.

 

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