September 16, 2011 12:00:00 AM
Original Source: hurriyetdailynews.com

Diamonds a best friend for investor  

ISTANBUL - Anatolia News Agency
Individual investors in Turkey are leaning toward diamonds as a new tool while gold prices have more than doubled recently, according to a sector rep.

Diamonds for the jewelry industry have begun assuming gold's place as a secure investment tool, according to the head of a sector association.

Gold prices have increased by more than double in a very short period of time, which has in turn affected sales in international markets, according to the head of the U.S.-based International Jewelers' Association's local branch, Fazıl Özen.

This trend has pushed investors and consumers to lean toward diamonds, whose prices are closer to past levels, Özen said in a recent interview with Anatolia news agency.

Purchasing diamonds as part of jewels on different occasions, such as marriage ceremonies, anniversaries or on Valentine's Day, has become widespread in recent years, mostly due to heavy advertisement, Özen said.

Diamond is increasingly being viewed as an investment tool – especially so in the last 12 months – due to an increase of about 50 percent in diamond prices in world markets, Özen said. Investing in diamonds differs from that in gold or other precious metals, as diamonds prices have never shown a decreasing trend, he added.

The share of gold in the price of jewelry processed with diamonds used to be lower in the past, but has now increased mostly due to the six- to seven-fold increase in gold prices over the past six years, according to Ayhan Güner, the chairman of the executive board of the Istanbul Precious Metals and Jewelry Exporters' Union. Because of this, people in Turkey have begun choosing largely diamond-based jewelry or diamond stones due to the better price, he added.

Turkey exports diamonds and diamond jewelry to the United States and European markets as well as to Russia and Dubai. The country must remove the tax on raw materials to increase competitiveness in the sector and make Turkey a hub, Güner said.

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