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UK Wealth Manager Cashes In On Hunger For Gold, Diamonds

Tom Burroughes Group Editor London 10 June 2011

UK Wealth Manager Cashes In On Hunger For Gold, Diamonds

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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