July 2005 Archives
Diamond Week In Review: 7/1/05
2carat+, H color+, SI2 clarity + diamonds are very scarce and driving higher dealer prices. Demand flat for inexpensive goods under the carat due to relatively weak retail sales by large chains and mass merchants. Far East steady for 0.40ct+ (J-M color,VVS-SI2 clarity).
Fancy diamond shape market very strong with good demand and scarcity of large goods. Princess cuts continue to be strong. Asschers, Radiants, and Emeralds weaker in June. Increased demand for Heart shape diamonds with shortages in larger sizes. Pears and Ovals steady.
First wave of price increases for polished diamonds in 1.5 carat + to 5 carats in round shape diamonds, D-G color and Internally Flawless to VS-2 clarity instituted last week in response to diamond rough price increases introduced by DeBeers at the last diamond sight two weeks ago in London. Further diamond price increases for smaller carat round diamonds and fancy shape diamonds forthcoming in the next several weeks as consumer demand greater than available supply.
Happy 4th of JULY Holiday weekend to one and all!!
Diamond Named After Nobel Prize Winner.
A 77.62 –carat diamond has been named after Mikhail Sholokhov, a well known Soviet writer and Nobel Prize winner. The announcement was made at the Russian Literature Awards Ceremony in Moscow on July 1, reported the Soviet TASS news agency.
The Sholokhov diamond has been added to Russia’s collection of over 400 Yakutian diamonds named after famed writers, scientists, historical events and finders of diamond deposits. Other large diamonds in Russia have been named after, Marshal Zhukov (79.7 carats), Sergei Prokofyv (79.6 carats), Mikhail Bulgakov (64.2 carats), Arkady Gaidar (50.4 carats) and Yevgeny Leonov (73.9 carats). One of the world’s largest diamonds is named after writer and poet Alexander Pushkin (320.6 carats).
Sholokhov lived from 1905-1984. In 1922 he became a journalist and published a number of short stories in newspapers. He made his literary debut in 1926 with a volume of stories called Donskie rasskazy (Tales from the Don), 1926, about the Cossacks of his native region. In 1926, he began writing Tikhi Don (And Quiet Flows the Don) which became the most read work in Soviet fiction. In 1939, he became a member of the Soviet Academy of Sciences and later vice president of the Association of Soviet Writers.
Show me the Money, Honey!
More than three-fourths of jewelry store workers say that good pay from an employer will keep them from looking for a new job, according to a new study from Diamond Staffing Solutions.
The jewelry industry staffing agency surveyed about 100 of its job candidates to find out what factors would cause them to remain with a store or to leave.
Asked to list the five most important factors to remain on a job, respondents named:
Good pay/ compensation: 77 percent
Opportunities for career growth: 66 percent
Challenging, rewarding or interesting work: 65 percent
Good benefits: 55 percent
Recognition/ respect from the company: 42 percent
Asked to list the top five reasons they would leave a job, respondents cited:
Insufficient pay/compensation: 67 percent
Insufficient opportunities for career growth and advancement: 58 percent
Insufficient recognition/ respect from company: 38 percent
Work isn't challenging, rewarding or interesting enough: 35 percent
Job instability: 34 percent
So what else is new?
China Becoming Major Diamond Center
Rapaport News reports this morning that Israel’s Ministry of Industry, Trade and Labor has declared China to be a preferred export target and will set up two permanent trade centers in two of China’s provinces, the ministry said in a press release on July 11. A special committee from Israel will choose the locations, thus ensuring Israel’s permanent commercial trade presence in China.
India, Mexico, and Brazil are already considered preferred export targets by Israel. Under the new plan, two companies in China will be awarded tenders by the end of 2005 and will receive a low flat fee covering overhead costs according to Globes on July 12.
The estimated boost to Israel’s export potential to China is about several hundred million dollars.
Managing Director of Israel Diamond Institute Ephraim Raviv told Rapaport he welcomed the move saying “throughout the world the offices of the ministry provide services to the diamond industry. We are very grateful. This will be a positive step for us. We are in the process of opening an office in New York and are seriously considering opening another office in Hong Kong, both dedicated to the diamond industry.”
China was Israel’s ninth largest export destination for polished diamonds in 2004 with exports reaching $98.1 million.
In 2004, Israel’s total exports to China rose 30 percent to $765 million as compared to $591 million in 2003. Diamond exports to China rose by 16 percent. The increase in Israel’s diamond exports to China is largely attributed to the easing of import taxes on diamonds to China. Diamond exports make up 13 percent of Israel’s total exports to China. Many Israeli owned diamond manufacturing firms have established plants in China over the last couple of years and are listed on the Shanghai Diamond Exchange.
Ah, Capitalism gaining a foothold in China; what would Mao say?
Diamonds and Watches: The Theme Continues.
Luxury watches that contain diamonds is a theme that never goes out of style. The latest entry has been introduced by Tiret who have teamed up with diamond firm Inter Gems-Claes to incorporate up to 26.5 carats of EXIRE diamonds to Tiret's wristwatch. Inter Gems-Claes, a Diamond Trading Company sightholder, has delivered diamonds for international jewelers and watch manufacturers for more than 100 years.
Damon Dash and Daniel Lazar launched Tiret New York in 2003 and the company calls its newest collection "an illustration of the way each Tiret timepiece ensures top performance and perfection".
I didn't know that adding diamonds to a watch guaranteed accurate time but it is great eye-candy. So who cares if the wearer doesn't give you the time of day! My Mickey Mouse bezel with plastic strap gets me to work on time...I think?
War of The Worlds Returns Tonight!
Well, folks; the All-Star Game is over and we start the second-half of the Baseball Season with the Yankees and Bosox meeting in an important 4 game series up at Fenway Pahk beginning tonight.
I Love You!
Yup, "Play Ball" will declared by the Home Plate Ump and the opposing players will also be exchanging some other choice 4-letter words!
Fasten your seatbelts. This should be Fun!
Major World Diamond Centers.
The well known ones are New York, Belgium, Israel, and India.
Coming up fast and already having a major impact are Mumbai and China which are poised for tremendous growth.
Diamond manufacturers, wholesalers, and retailers are targeting China for it's tremendous market. Industry estimates are that China will be a major player within the next five years.
Mumbai is similarly positioned as they are working with an extremely cooperative Government. There are no excise, VAT, or GST taxes which is facilitating commerce.
Diamond Week In Review 7/15/05
A lull in the action as the Diamond and Jewelry Industry in New York is on vacation. Most firms will be back and re-open on Monday, July 18th.
Better Cut quality diamonds are in very strong demand and bringing price premiums. Ideal cut round brilliants, Princess cuts, Asschers, and Cushions are in high demand and commanding premium prices. Supply in 1.60 - 1.90 carat, D to I color and VVS to SI-2 Clarity are in very high demand with limited supply.
At DeBeers July Sight In London, Sight Holders were hit with a 2% Value Added Services charge which is tantamount to an increase in the price of their diamond rough allocations. This is a new policy which is being implemented as part of DeBeers new Supplier of Choice Program.
Sight Holders expect another increase in rough diamond prices come the September Sight and this will surely translate into another increase in the price of polished diamonds as we head into the fall Diamond Shopping Season.
Did You Know That China Has Diamond Mines? Believe IT!!
Yes, folks, you heard right. China has Diamond deposits! No, I did not see this in Ripley's Believe It or Not!
China Diamond Corp., reported a 108 percent increase in production results from the 701 Changma Diamond Mine located in Shandong Province, China. China Diamond is headquartered in London, Ontario, Canada, and is engaged in mining for diamonds and the exploration and advancement of diamond and gold prospects in China.
The 701 Changma Diamond Mine is the company’s principal mining operation the company said in a press release on July 14. Total carats produced from January through March 2005 were 9,240.50, but from April through June total carats produced hit 19,221.20.
Operations were carried out in a higher grade area of the deposit, namely the Small Pipe, which returned an average monthly grade of 1.23 carats per ton. This area is expected to continue to be in production well into August 2005.
Hey, I've got a great marketing idea for the Chinese Diamond Dealers...a Panda wearing a Diamond Tiara!
Gold Predicted To Rise To $725.00 an Ounce.
By the year 2010, as China becomes the leading jewelry consumer, Merrill Lynch & Co., predicts gold may increase to around $725 per ounce.
Graham Birch, fund manager for Merrill Lynch, told Bloomberg News that consumers in China are growing their wealth, and that they have high savings rates, which is all-ripe for driving jewelry sales.
In 2004 China's economy grew 9.5 percent to $1.65 trillion, and retail jewelry demand for gold rose 11 percent to 224 tonne, according to GFMS Ltd.
But another analyst didn't agree, Bloomberg reported that Barclays Capital expects gold to drop about 10 percent by year-end 2005. Gold was trading mid-day July 15 at around $420 per ounce.
The Importance of Appraisals and Insurance: I
For most individuals, the purchase of fine jewelry is a major investment and, as such, should be insured like other valuable items (for example, your car, home, or expensive electronic equipment). However, most people who purchase homeowner's insurance assume that their jewelry is automatically covered under that policy. Although many homeowner's insurance policies include jewelry, coverage is usually limited to small amounts like $1,000.00. This amount is also subject to your homeowner's deductible, which in most cases, is $250.00. Therefore, $1,000.00 worth of jewelry insurance, after a $250.00 deductible, equals only $750.00 in total jewelry coverage.
There are very few of us who own less than US$500.00 worth of jewelry. Most people are unaware of how much their entire jewelry collection is worth. Two wedding bands alone can exceed the $750 jewelry coverage you may have under your homeowner's policy. So, how do you protect your fine jewelry from loss or theft? The easiest and most cost-efficient way is to add each individual item to your homeowner's policy, or add what is referred to in the insurance industry as a "separate rider." This is a very simple procedure and, in the long run, could save you thousands of dollars if a loss should occur.
The first step is to find a qualified jewelry appraiser to write an accurate appraisal. Find a qualified jewelry appraiser (preferably one who has a gemological background). You may also want to check the educational background of the person who will be writing your appraisal. No state or federal government agency requires that a jewelry appraiser have any gemological training whatsoever, so be careful whom you choose.
Once you have secured an accurate and up-to-date appraisal, call your insurance agent and have your jewelry items added onto your existing homeowner's or renter's insurance policy. If your addition is a certified piece of jewelry, be sure to submit a copy of the certificate to your insurance company. There will be an additional cost or premium associated with this addition. However, for the protection, coverage, and peace of mind you are receiving, the premiums are a small price to pay for the added security. In most cases, the premium is based on the appraised value of each jewelry item. The cost averages between $10.00 to $25.00 per $1,000.00 in jewelry value. For example, the insurance premium for a diamond ring appraised at $5,000.00 will be $50.00 a year if the cost is $10.00 per $1,000.00.
If $50.00 seems like a lot of money, consider what you get in return. You are covered 100% without a deductible if the diamond ring is stolen anywhere in the world, if the diamond is lost in a fire, or if the diamond mysteriously disappears or is damaged. If your diamond is chipped, the insurance company will replace or repair your diamond up to the policy limits.
Keep in mind that insurance policies differ from state to state. Consult your insurance agent and carefully review your jewelry policy before you buy additional insurance.
Appraisal Standards from Chubb
AS you might know standards for appraising jewelry can be different from one insurance company to the next. In The state of NY you need a license to cut hair but not to appraise a $500,000.00 diamond necklace for insurance, estate, taxes or any other purpose. No offence to any hair stylists! Here is another set of appraisal standards from Chubb. Here is the link.
Appraisal Standards From J-Bar
Every few days I get the question “What are the standards for an appraiser/appraisal? There are many opinions to that question; but here is one Committee that has given their standards. The jeweler’s board of appraisers review, a division of JVC the Jewelers Vigilance Committee gives standards for appraisals.
Here is the link.
Jewelry Show Coming To New York.
JA New York Summer Show is set to kick-off on July 31, 2005, at the Jacob Javits Center in New York City. According to VNU Expositions, some 1,800 exhibitors will convene at the show, and the event expects to attract some 13,000 buyers and trade professionals.
Some of the presentations on schedure are: For its opening day, July 31, Katherine Stone, with Engage Consulting Inc., will keynote. While at Coca-Cola Company, Stone led her team in the creative development and execution of experiential marketing concepts, applicable across a variety of channels, aimed at building volume and long-term Coca-Cola brand equity.
A panel will engage the topic of marketing on August 1 during the lunch time session. Experiential Marketing: "Engaging, Entertaining, Educating Customers to Drive Sales," will be presented by representatives from a fragrance company, a luxury private jet company, Barney's New York, and others. Neil Benedict from Affluent Dynamic Moderator will moderate this informative and essential session.
On August 2, during the lunch time session, an educational panel will address "Marketing to Women: What Turns Them On/What Turns Them Away." Carrie Broussard, senior marketing director, founder of the Women On Their Way Program for Wyndham Hotels; Cynthia Sliwa, designer of Apprecia Jewels; Kevin Burke, Lucid Marketing; and Randi Molovsky, fashion writer, will all lend their expertise to this critical subject. The panel is sponsored by the Jewelry Information Center (JIC) and will be moderated by Helena Krodel and Amanda Berg from the organization.
Diamdel, Antwerp Council In Joint Education Partnership.
National Jeweler reports that Diamdel, an independently managed rough diamond trading company within the De Beers Group, announced a partnership with the Diamond, Jewellery and Management Institute (DJMI), a joint initiative of the HRD Antwerp World Diamond Centre and the University of Antwerp Management School (UAMS).
"Diamdel's engagement and resulting co-sponsorship of the institute represents an ideal synergy for us," said Frank Auger, managing director of Diamdel NV, in a release. "It adequately reflects both our vision for helping to globally encourage the entrepreneurial spirit of the developing industry, and also our passion for playing an immediately tangible role in enhancing the sustainability of small businesses within centers such as Antwerp."
Auger added that the partnership would allow Diamdel to provide its clients with access to DJMI education and training, calling it a key component to the growth of the secondary industry. Diamdel carried out a similar initiative with the Israeli Diamond Manufacturers Association (IsDMA).
"The secondary industry has a huge hunger for knowledge development and with this fact in mind, we look forward to meeting and ideally exceeding our clients' needs through this co-sponsorship arrangement with DJMI," he said.
Diamdel's involvement complements the institute's mission to offer world-class education and technical skills to the industry, DJMI director of development and conceptual founder of the Institute Marcel Pruwer said in the statement. Diamdel's presence in key cutting centers and in Southern Africa and China enables DJMI to channel its programs throughout the diamond pipeline, he added.
Rare Australian Cognac Diamond Extends Hand Of Friendship!
Australia's "Daily Telegraph" newspaper reports this morning that Janette Howard, wife of the Austalian Prime Minister has kept a low profile since arriving in Washington with husband Prime Minister John Howard, but a $20,000 diamond drew her into the public spotlight today.
The glittering 2.09 carat, cognac-coloured diamond was presented to Washington's famous Smithsonian Museum by Mrs Howard on behalf of Sydney jeweller Nicola Cerrone and Rio Tinto's Argyle diamond mine in Western Australia.
The museum has an extensive collection of gemstones from around the world, but the Argyle diamond is its first from Australia.
Wearing a borrowed gold Cerrone broach featuring champagne and cognac diamonds on her pale lemon suit jacket, Mrs Howard was slightly reluctant to hand over the Argyle diamond to the Smithsonian during a function at the Australian Embassy in Washington.
"It's mine, it's mine," she laughed.
Mrs Howard said the diamond's beauty was typical of Argyle diamonds, which were internationally renowned for their brilliance and colour.
"It is not at all surprising that these diamonds should be found in the Kimberley region in the northwest of Australia," she said.
"The spectacular natural beauty spot in this ancient and remote area and its awesome, gorgeous and pristine beaches is a worthy match to the stunning and fine beauty of the Argyle diamond and reflects very much the colours that you see in the Australian landscape in that area."
Mrs Howard said the donation of the Argyle diamond to the Smithsonian highlighted the friendship and mutual respect between Australia and the US.
"Political and economic bonds between our countries are of great importance, but it is clear to me when I visit that we owe much of the strength of these bonds to the cultural links and the friendships between everyday Australians and Americans," she said.
Smithsonian's undersecretary for science David Evans assured Mrs Howard the Argyle diamond would be happy among the museum's gem collection.
"Many millions of people will have an opportunity to see it in the Natural History Museum, five or six million people a year typically and almost all of them visit the national gem collection," he said.
"So I think it will be a special opportunity for people to see the connection between our two countries while focusing on something bright and glittering that makes almost everyone smile."
SI-3 Clarity Grade: Legit or Gimmick?
With diamond prices consistently going up we have received inquiries regarding the "SI-3" clarity grade. This clarity grade was introduced and offered by several grading labs beginning in 1992 at the behest of manufacturers seeking to squeeze more dollars out of consumers.
In our opinion and in the opinion of many in the trade, the SI-3 grade is a bulls--t grade that is removing the stigma of and really elevating an I-1. It's twilight zone diamond grading or like saying she's "a little bit pregnant."
Clarity grading of inclusions is predicated on three factors: 1. Location, location, location, 2. Size, and 3. Color. Inclusion(s) towards or in the center of the stone that are black, large and perhaps visible without magnification will logically receive a lower clarity grade than smaller, white, and/or wispy inclusions towards the periphery. Clarity grading does carry some subjectivity, but it is highly instructive that the #1 grading lab, GIA, does not acknowledge or use the SI-3 clarity grade.
Your ability to see inclusions in the face-up position without a loupe is critically dependent on the Cut of the diamond. The better the Cut, the more light coming up and out throught the top of the diamond, and the less likely you will pick up the inclusion(s). This goes for every diamond shape with the possible exception of the Emerald Cut, in which VS-2's may be noticeable due to it's unique facet geometry.
Improving the Cut of a diamond may therefore make an I-1 / I-2 clarity grade a viable candidate for purchase. Use your eyes and work with reputable vendors that know their diamonds.
JFC Is A Diamond Star!
National Jeweler reports that Jewelers for Children (JFC) has committed $4.15 million in donations to its four charity partners and other organizations that benefit children.
The four partners, which JFC calls its Legacy Charities,are: St. Jude Children's Research Hospital, Make-A-Wish Foundation of America, Elizabeth Glaser Pediatric AIDS Foundation, and National CASA (Court Appointed Special Advocates) Association. Each of the four was pledged a $975,000 donation by JFC's board of directors at the group's annual Facets of Hope fundraising dinner in Las Vegas in June.
Additionally, the board donated $150,000 to Make-A-Wish Foundation International to fund the group's program in India and $100,000 to the Jeffrey W. Comment Memorial Endowment Fund, which provides to additional youth charities and was named for the late Helzberg Diamonds' CEO and JFC board member.
JFC receives support from jewelry trade organizations, jewelry and watch manufacturers, retail jewelry stores, individual members of the trade and consumers. Over the years, JFC has raised more than $18 million for young victims of illness, abuse, and neglect through various vehicles, including the Facets of Hope dinner, sales of JFC holiday cards, in-store collections, Hero for Hope membership, charity golf tournaments and raffles.
Shine On!
eBay Sets Revenue Records!
During its second quarter of fiscal year 2005, Internet auction powerhouse eBay Inc., logged $1.5 billion worth of jewelry and watch transactions. According to eBay's quarterly statement, the website has 157 million registered users.
The company itself recorded a 40 percent increase in corporate revenues from 2004 to close second quarter at $1 billion on June 30, 2005. Operating income rose 49 percent to $379 million, and eBay earned $292 million, or 21 cents per share.
Want To Own A Piece of the Rock? Here's A Bargain!
Dwyka Diamonds Ltd. has sold an 18.11 carat rough octahedron diamond of H/I color and S12 quality for more than $130,000, the company announced in a press release on July 21. The diamond was mined from the company’s Nooitgedacht alluvial mine in South Africa.
Diamond Week In Review - 7/22/05.
High consumer demand diamonds are .90 - 1.25 carat sizes in D-I colors and VS-1 / SI-2 clarities; 2 carats in H-I color and VS-1 / SI-2 clarities, and 5 carat size rounds in F-H color, VS clarity.
Ladies; I'm sure you'd like to get a 5 carat rock from your Man!
Gold and Platinum prices are steady.
Swiss Watch Exports Up, Up, Up!!
The Federation of the Swiss Watch Industry (FH) announced that the value of Swiss watches exported for the first six months of this year topped $4.34 billion, rising 11 percent over the same period last year and exceeding forecasts.
Finished watches constituted the bulk of that growth, FH reports. The value of finished Swiss watch exports reached $3.95 billion for the six-month period, growing 12.3 percent compared to the same period in 2004.
Gold watches represented nearly half that growth by value and comprised 20.3 percent of finished Swiss watch exports for the period. Bimetallic watches, which represented 20.9 percent of the period's finished watch exports, and steel watches, which comprised 8.2 percent, were also credited with fueling finished Swiss watch exports' growth in value for the first half of the year.
In terms of market share, the United States remained Switzerland's largest importer of Swiss watch and clock products, taking $740.1 million in value for the six-month period, up 14 percent over last year. Hong Kong, Japan, Italy and France rounded out the top five markets for Swiss watch and clock exports for the first half of 2005.
Sri Lanka Follows Canada and India In Reducing Diamond Import Taxes.
Sri Lanka’s cabinet ended its 15 percent Value Added Tax (VAT) on imports and trading of rough, cut and polished gemstones, diamonds and precious metals, reported the official Daily News on July 24.
The Daily News quotes Rohitha Bogollogama, minister of advanced technology and national enterprise development,“We have taken a bold step forward in the right direction to make Sri Lanka the hub in the gem industry,” said . Additional incentives encouraging Sri Lanka’s mining sector will be added to the 2006 budget, she added.
Sri Lanka’s gem and jewelry industry is expected to surpass tea and apparel sector exports in the future.
The Sri Lanka Gem and Jewellery Association (SLGJA) said its in the process of introducing an internationally recognized quality certificate certifying the quality of gems purchased in Sri Lanka. Currently, certificates that are issued are not recognized internationally.
Future industry plans include setting up a Gem laboratory and gem trading floor in Ratnapura, Bogollagama told journalists at a press conference.
Sri Lanka’s gem and jewelry exports reached $101.23 million in 2004, a significant growth from 2003, said Ajith Perara, senior manager of the National Gem and Jewellery Authority (NGJA.) Gem and jewelry exports in the first half of 2005 stood at $44.80 million.
SLGJA has organized the 15th International Gem and Jewelry Exhibition 2005 (Facets) due to take place from August 31 to September 3. Facets organizing committee chairman, Macky Hashim said that Facets is the only national gem and jewelry show which is recognized internationally. 95 percent of the booths have already been sold out to many international participants.
DeBeers: Profits Down, Closes Mines.
Two interesting announcements today by Debeers in another clear indication of their repositioning in the market from solely wholesale miners and rough sellers to a focused retail emporium.
First announcement is that they will be closing their South African Mines.
Gary Ralfe, managing director of De Beers, told Reuters on July 25 that the mines are exhausted of resources. The company's Kimberley mines would close by year-end 2005. Their diamond mines in Kimberley, South Africa, were opened in 1871, and elimination will result in the loss of approximately 1,000 jobs.
Retreatment at Kimberley --a process of scouring waste deposits for leftover diamonds-- would continue, according to Ralfe. The company's Koffiefontein mine faces closure or sale in 2005, and its Oaks mine may close or be sold by year 2007.
De Beers' Cullinan mine, Ralfe said, is still far from profitable; however, as a long-term resource it remains positive for kimberlite ore.
Second, DeBeers profits declined 21% compared to the first half of 2004. This was due to unfavorable exchange rates between the dollar and the South African Rand and the completion of stockpile selldown in 2004 which significantly added to the bottom line.
DeBeers is banking on emerging markets in China, Japan, and the Gulf to boost sales, increased sales to the U.S. of 5-6%, further prices increases (OUCH!), continued progress in the exploration and mining of diamond deposits in Canada, and the further development of their Supplier of Choice (SOC) Program which mandates that their site-holders be able not only to manufacture the rough diamonds but have the marketing skill and infrastructure and to sell these diamonds to you, the consumer. To this end, Debeers last month opened a retaiil store with LMVH on New York's Fifth Avenue and is planning on opening at least another 20 retail "Salons" ( calling them 'outlets' is a NO-NO ) by mid 2006.
If you needed anything to show you how dramatically DeBeers is changing the way they do business you can find it in their most recent announcement of new siteholders for the upcoming 3-year cycle period. Stuller, the findings company is now a siteholder!
Times, they are a'changin!
Gold Shines Bright In Asia!
Reuters today reports that the fascination, importance and esteem of Gold among Asian peoples is on a much higher level than it is here in the United States or in Europe.
Villagers in Indonesia may wear one or two gold teeth to boost social status. In India, parents will not marry off their daughters without giving them some gold jewellery for financial security.
Ancient texts have talked about Indian merchants venturing on dangerous voyages to distant lands in search of gold. In China, gold inlay was applied to bronze objects by at least 1200 B.C.
Gold -- the Glowing Dawn -- has fascinated Asia for centuries and its demand is likely to only increase in the years ahead, led by China which is fast becoming the last gold-crazed nation in this region.
In Asia, the yellow metal is not only an item of adornment but also an investment -- something that holders in quake-prone Japan can sell back for cash in times of trouble.
“In a longer term, you ask people whether they have confidence in the US dollar? Not really, right?” asked Albert Cheng, Far East managing director of the World Gold Council.
“Gold is a good financial vehicle where you can put your money in,” he told Reuters in Singapore.
Several Asian countries have seen an increase in demand for gold for jewelery and investment in recent years, reflecting economic growth and the metal’s growing popularity.
The world’s biggest buyer, India, it is estimated will consume 600 tons of gold this year, up from around 590 tonnes in 2004. India’s gold demand surged 17 percent in 2004 from a year earlier.
China, another main buyer whose consumption may eventually match India’s, is likely to see demand rising by 10 percent this year as the country liberalzes both its bullion market and diamond and jewelery markets to the West and Europe.
Dealers and analysts say investors have diversified into hard assets such as gold because of the significantly high U.S.A. trade deficit and China’s revaluation of the yuan -- a move which will lead to stronger Asian currencies and a weaker dollar.
A weaker dollar means a more affordable price of gold, which is quoted in US dollars and currently stands at around $425 an ounce.
“In a country like India, we don’t have enough safe investment alternatives. People also have money in banks, but they want to create a portfolio and gold is an important part of the basket,” said Ranjeeth Rathore, a dealer in Madras.
“I have seen that when prices are low, people don’t listen to any investment advice. They say they want gold. That’s it.”
Indeed, gold prices have been volatile in recent months, touching a 3-month high of $443.60 in June, just a few dollars away from this year’s peak at $446.70, before profit-taking and a firming US currency erased some of the gains.
Gold hit a 16-1/2-year high of $456.75 in December.
But these choppy prices hav failed to dampen the demand in India, where jewelery forms an important part of Hindu marriages, with parents giving their daughter gold for financial security.
Hindus treat gold as an auspicious metal and like to buy and give it as a gift during religious festivals.
“The first choice of Indians is gold. It’s a sensible investment. They want to invest in something which is tangible,” said Rajesh Mehta, chairman of Rajesh Exports Ltd, India’s largest jewelery exporting firm.
“It is the best saving investment available anywhere in the world. Gold is the only commodity in which you can invest and can also use,” he said.
The situation is be bit different in Indonesia, where consumption could fall this year because of a firm gold price and record-high oil prices, which cause prices of basic essentials to rise. Indonesia, Southeast Asia’s largest gold buyer, consumed 88.9 tons of gold in 2004, up from 82.7 tons in 2003.
“Consumption may be below 80 tons. The gold price stays high at above $400 while buying power is depressed,” said Leo Hadi Loe, an independent analyst in Jakarta.
But Indonesia may be a one-off case. Neighbouring Vietnam saw consumption picking up 10 percent last year to 65 tons as locals sought hard assets for protection against volatile dong currency. Demand is likely to stay firm this year, say dealers.
Analysts are also upbeat on Asia.
“Strength in both China’s economy and currency and heightened investor interest should support Asian gold demand over the next year. And with rivers of energy dollars flowing into the Middle East, demand there shouldn’t be too shabby either,” Commonwealth Bank of Australia said in a report.
Shine On!
CNN Becomes Diamond Maven!
Diamonds have that mystical power to make pundits out of novices and wannabees as evidenced by the cogent and detailed advice dispensed by CNN yesterday to consumers on how to buy a diamond.
Comments in parentheses are mine.
The Cable News Network (CNN) website told its readers on July 26th that diamond engagement rings are "getting bigger and bigger" and that "now" is the time to "bet on love and money."
The story also describes CNN staff engagement rings given during the course of 2005. CNN holds second spot for broadcast news ratings (behind Fox News) in the United States, and its news website receives about 23 million visitors each month.
According to the news report the average price of a diamond engagement ring is $2,600, and that even larger (than 1-carat) rings are growing more popular --using style icon Paris Hilton's 24-carat emerald cut diamond ring-- as an example.
CNN provided 5-tips on buying a diamond ring. The news company told men to "involve her" with the diamond ring purchase; it labeled the "best" cut as the "ideal cut;" ( Definition, please?! )and CNN called the "5th C" the diamond's certification and not to leave the store without it ( which grading lab, fellas? it makes a big, big difference ) CNN's consumer tip on finding a lower price was to "go shy" on weight and keep with "near-colorless" as opposed to flawless ( you're mixing up color and clarity) when buying a diamond ring.
This kind of generalized, superficial, and nebulous advice is more harmful than helpful to consumers. I don't believe you would buy a home or a car this way, so why should the purchase of a diamond costing thousands of your hard-earned dollars be any different? The answer: it shouldn't.
Do your homework and research. Get as much information as possible. An educated consumer is our Industry's best customer and will give you the ability to make a purchasing decision that will max your dollars and provide you with Lifetime value and happiness!
Start Right Now!
A good place for you to begin is the Diamond Basics and Diamond Information sections of our DiamondVues Blog. Continue on to the sections on Jewelry and Diamond and Jewelry Appraisals. Then segue over to the Internet's #1 Information Station, Diamondtalk where you will find accurate and timely information and discussions on all things diamonds and jewelry.
Happy Shopping!
Ladies: Would You Accept A Diamond From A Math Professor?
A study conducted by two Math Professors, Peter Sozou and Robert Seymour of the Center for Mathematics, University College of London was published this week in the Proceedings of The Royal Academy .
In their experiment they set up courtship as a sequential game and asked the question; What are the characteristics of a good courtship gift?
Their model was structured like this: The male offers a gift to a female; after observing the gift, the female decides whether or not to accept it; she then chooses whether or not to mate with the male. In one version of the game, based on human courtship, the female is uncertain about whether the male intends to stay or desert after mating. In a second version, there is no paternal care but the female is uncertain about the male's quality. The two versions of the game are shown to be mathematically equivalent.
Expensive investments during courtship does less to convince the woman of the man's long-term intentions and whether he'll stick around once there are kids.
Theoretical modeling put courtship as a sequential game, and concluded that an expensive night-on-the-town was a sounder investment than expensive jewelry, according to Sozou and Seymour.
So, Ladies, are these academics on target and which would impress you more about the guy? An expensive one time weekend trip to Paris or a big Diamond Rock?
Diamond Week In Review: 7/29/05
Diamond Prices continue to inch up. Last night, Rapaport News, an Industry Newsletter reported that prices for 1.5 to 5 carat round brilliant diamonds increased by 1-3 percent, encompassing D-J colors and Internally Flawless to SI-2 Clarity Grades.
Increased consumer demand and reduced availability of gem quality diamond rough are cited for these prices increases.
Indications point to additional price increases for smaller carat sizes as well, coming in the next few months.
And you thought a barrel of Oil was expensive!
One Reason Diamond Prices Will Continue To Go Up!
Interfax News Agency reports that Rough diamond production in Russia's Yakutia territory fell 9 percent in terms of carat weight.
ALROSA, owner of the diamond mines in the area, decided to reduce physical volume of rough due to increased diamond extracting costs in mines, and due to increases in rough prices, which boosted revenue overall just the same.
