Joanna Hardy,director of jewellery at auction house Sothebys, said: "We don't use the word investment with jewellery, it is something that should be worn and loved. That said, engagement rings are like cars, if you take them back the day after you bought them, then they are not worth as much. On the whole, though, if you hold them for a while, they will go up in value."

The better the quality of the gem, and the bigger it is, the more it is a serious investment which will appreciate over time. But these stones start at perhaps £3,000 or £4,000. Designer jewellery with a big sparkler will appreciate most of all, but again will have to be priced upwards of about £3,000. Anything over £10,000 looks like a good bet.

Hardy added: "At the moment engagement rings are selling very well at auction. Good-quality, single-stone diamond rings we could sell all day, and if it is signed by a well-known house, like Cartier, Tiffany and Hamilton, that is always better. Inches, too, is very well respected. As a general rule, people should buy the best quality they can afford."

There are four things to keep in mind when shopping for a diamond: cut, colour, clarity and carat. The latter refers to the gem's weight. Typical engagement rings in the UK are between half and one carat. The most valuable diamonds are colourless, although yellow and pink diamonds have become fashionable alternatives in recent years. Clear (or white) diamonds are graded D to Z, with a perfectly colourless diamond graded D. How much a diamond sparkles will depend on its cut and clarity. A perfect diamond will be classified IF, for 'internally flawless'.

Round and princess (square) settings are the most common choices for engagement rings, so gentlemen might want to check before opting for a heart or pear-shaped stone.

Watch for terms such as 'clarity enhanced', as this means the diamond has been artificially altered, not given an extra polish. Indeed, as tradition dictates that at least one month's salary is spent on a ring, it is well worth ensuring the diamond bought has a certificate verifying its quality from an independent laboratory. Any reputable jeweller should not be afraid of a buyer wishing to have the quality of their stone verified.

Platinum has been fashionable in recent years, although yellow gold (rather than white or rose) is also popular. When it comes to gold, it is the karat (not to be confused with the earlier carat) that counts, as this tells the purity of the gold in the alloy: nine-karat gold will be less than 40% gold, 18-karat around 75% and 24-karat is 100%.

Experts do not recommend buying diamonds over the internet, as they are better viewed. However, there is no harm in going online to research the current prices for size, quality and setting. A half-carat diamond in either a princess or round cut - G clarity - will cost around £1,500, according to The Diamond Shop, while Cool Diamonds has a one-carat solitaire - D clarity - set in 18-karat gold for £6,730. Those thinking of buying a ring from outside the EU should be aware that UK tax will be due when it enters Britain.

Cynics who think all this is romantic folly might still want to consider investing in diamonds and gold. The demand for diamonds has gone through the roof, boosted by growing affluence in China and India. De Beers, which controls 60% of the world's diamond production, has increased its prices five times in the past two years, but demand has still risen by 8% over the past 12 months.

Indeed, James Picton, an analyst at broker WH Ireland, believes that there could be a 40% supply shortfall by the end of the decade.

Meanwhile, the spot price for gold reached a 25-year high last week. The precious metal has had a phenomenal run in the past few years: when Gordon Brown flogged 60% of the Bank of England's gold reserves in the summer of 1999, the price was more than $300 lower at $254 - last Wednesday it soared to $572.

Investors interested in tapping into this boom have several options.

The easiest is to buy sovereigns or South African Krugerrands. The Bank of England, coin specialist Spink and many high street banks should be able to assist. Expect to pay around $250 an ounce (a sovereign is a quarter of an ounce).

However, diamonds are an altogether different affair, according to Clem Chambers, chief executive of private investor network ADVFN. He says that buying shares in De Beers is a far more sensible way for an investor who thinks the price of diamonds is going up to get exposure.

Jewellers may have seen sales soar in the past few years, but their profits and share prices have been hit by the rising cost of raw materials (silver, platinum and other gem stones are rising, not just gold and diamonds).

Just as the rising price of oil is good for those who find it and get it out of the ground, shares in mining and exploration companies involved in precious metal production have been rising with spot prices.

Peter Hambro Mining, which is listed on the Alternative Investment Market (Aim) and last week said it was increasing production at its Russian gold mine, has seen its share price more than double in the past year, while Highland Gold, another gold producer, has seen its share price rise by more than 40% over the past 12 months. It is important to note, though, that the shares in mining companies can be incredibly volatile. Highland Gold's share price dipped almost 30% last summer before rallying.

For those who would rather leave stock selection to professional fund managers, most of the big mining and natural resources funds will have exposure to gold and other precious metals. Merryl Lynch Gold and General, Merryl Lynch World Mining, First State Global Resources and JP Morgan Natural Resources are some of those that have such exposure. The latter is up 50.6% in the past 12 months.

Gold a shining buy since the Chancellor's sell-off

MARK Rogers' interest in investing in gold was first sparked by the Chancellor Gordon Brown's decision to sell off much of the Bank of England's gold reserves. History has proved Rogers right - he bought in when the spot price for gold was $275; by last week it had risen almost $300.

Rogers, an operations manager in the motor industry, said: "I've been in gold for about five years, since the stock market crash when I looked around and thought the dollar was overvalued as I thought American consumers had too much debt. I've always been a bit of a contrarian, and I thought if Brown is selling, maybe it is a good time to get in."

Rogers' thinking turned out to be right. He bought into a rising price, missing the bottom of a 20-year slide in the price of gold by just $20. However, the married father of two decided not to invest in gold bars or sovereigns, believing better returns were available from the companies that find and mine the precious metal.

"Initially I went in via general mining funds which invested in a spread of mining companies and so reduced risk," he said. "But I then sought to invest in companies with an ability to expand production."

He settled on Avocet Mining and Patagonia Gold. The former has mines in Indonesia and Malaysia, while the latter operates in South America. In the time he has owned Avocet stock, the Aim-listed company's share price rose from 18p to £1.40.