Investment-grade polished diamonds are on track to post returns of 15% this year, outperforming UK stocks and even gold, as some investment managers express concern that gold may have overreached itself.

Last year prices for investment-grade diamonds slumped 10% while gold soared 25% as investors sought a safe haven for their assets. Gold has typically been perceived as a safe asset for reducing exposure to volatility and counterparty and currency depreciation risks.