The recovery in the diamond market is encouraging investors with an interest in gems to consider buying into the jewellery and mining sectors. The platinum and diamond industries have stabilised after steep declines in demand in 2008 and are recovering from a low base.

Shares in so-called diamond equities – which include jewellers and producers – are expected to see some upside as the economy recovers and consumers splash out on expensive purchases. “It appears that earnings may have bottomed in the diamond industry,” wrote analysts from the investment management firm Brewin Dolphin in a recent note on the sector. “De Beers reported an operating loss in 2009 after essentially halving production. Although management is cautious about the near term, it expects to return to profitability in 2010. We would expect this trend to be similiar across the industry.”