Further gloomy predictions for the jewellery trade have emerged today from a number of industry analysts.

Experts say that the current global political climate will hit the luxury goods market hard with the jewellery industry expected to bear the brunt of the downturn.

Sagra Maceira de Rosen, an analyst with J.P. Morgan in London, also noted that Southeast Asia would struggle to cope with the outbreak of the Severe Acute Respiratory Syndrome (SARS) disease.

Prior to the outbreak of SARS, industry watchers had pinpointed Japan - the world's largest luxury goods market - as one of the few areas resistant to the current political climate.

Meanwhile Goldman Sachs analyst Jacques-Franck Dossin said the European luxury goods sector would also suffer, particularly in the event of an extended war in Iraq.

However, some good news did emerge from the luxury watch market, which experts say has proved resilient.

According to the Associate Press retailers at this year's BaselWorld trade fair said sales of gold and platinum watches continued to do particularly well.