Richard Drucker, publisher of The Guide, joined a full house of DCGIA members for an entertaining and visually rich presentation on September 24th. Richard addressed a myriad of topics that ranged from current economic trends to fancy colored diamonds, treatments and their respective effect on pricing, If you couldn’t join us for the lecture, you missed a six part lecture compressed into 2 hours.
What’s Going On in the Industry – The US economy, with less buying power in the middle class, continues to place downward pressure on jewelry sales. Since 2009 7% of Americans saw an increase of 27% in income, while 93% saw a 4% decrease in their income. While the US economy may be steadily improving, it is not enough. Record highs in the stock market, while helping retirement accounts, has little affect on day to day disposable income.
The steady rise of precious metal prices has resulted in alternant metals being used and developed for jewelry manufacturing. Past influence of China and India driving prices up, has slowed as both economies are in a downward cycle.
By this time, everyone in the industry should be aware of the Burma embargo on jade and rubies having been extended, making the trade in Burma jade & rubies illegal.
Mean while, naming glass-filled rubies “composite rubies” does not make them any less junk stones. Complete disclosure is important to maintain consumer confidence in the jewelry industry.
Tanzanite One promotes tanzanite trying to boost prices, and has announced an online retail gemstone and jewelry boutique. Opened in August 2013, the store offers consumers worldwide the ability to buy direct from the mine itself. We will have to monitor this to see if it does increase value over time.
Beneficiation is a key topic of conversation in the industry, focused on both viability and how beneficiation in the local cutting centers would affect the traditional cutting centers. In its simplest explanation, beneficiation stops exports of rough material, implementing cutting and polishing in the local producing countries to add value to the diamonds or gemstones mined in that country. It is already in play in some African countries, Botswana, Namibia, Ethiopia, and South Africa. Time will tell, but it is expected that this will force prices of diamonds and colored gemstones higher.
Bringing Diamonds into the Investment World – Gem Shares LLC is bringing the diamond industry to the investment world as a tool to obtain exposure to the last untamed commodity??? We will have to see how this plays out.
Diamonds as an investment? Nobody can predict which way diamond prices will go. Which diamond provides the best investment? None of them, as you can not guarantee future value. The only real question to ask is which one is the most beautiful or pleasing to the eye.
Marketing Strengths – Fancy Colored Diamonds Fancy Colored Diamonds are in a class alone as they are both rare (less than 2% of diamonds are Fancy Colored) and in recent years, prices for top-quality colored diamonds have increased rapidly, driven by collector demand and limited supply.
Fancy Colored Diamonds draw record prices: Christie’s International, New York, April 16, 2013. The ‘Princie’ Diamond – A 34.65-carat Fancy Intense pink cushion-shaped diamond. Sale price: US$1.9 million per carat.
Diamond Grading – Diamonds are generally evaluated by a diamond color scale that was developed by GIA. The Color Grading Scale starts with the letter D and ends at Z. D colored diamonds have the least amount of color and Z colored diamonds have the most color in the range of D-Z. Beyond Z color, diamonds are graded as Fancy Color with a separate set of parameters.
Fancy Color begins past the grade Z in the GIA color grading scale. While colorless, near colorless, faint and light diamond colors are graded from the face-down position. Laboratories assess fancy color diamonds from the face-up view of the diamond.
Evaluation of Fancy Colored Diamonds is based on the hue, tone, and saturation of each diamond – Clarity in Fancy Diamonds is not as important to value as the color!
Hue – A diamond’s overall body color Tone – A diamond’s lightness or darkness in relation to body color Saturation – The intensity or degree of color, modifying colors are also assessed, as they impact the overall hue of the fancy color.
For example, a yellow diamond may have a green modifier, and will subsequently be graded as “Fancy Greenish Yellow.” A blue diamond may have a grey modifier color, and will be graded as “Fancy Greyish Blue” and so on. Some modifier colors decrease the over all value (brown) while other colors will increase the value (pink).
Fancy color diamonds are graded using the following terms: Faint – Very Light – Light – Fancy Light – Fancy – Fancy Intense – Fancy Dark – Fancy Deep & Fancy Vivid
Value Ranking of Fancy Colored Diamonds: RED (highest value and rarest color) – Pink – Purple – Blue – Green – Orange – Yellow – Brown (marketed as Champaign, brought these affordable fancy diamonds to the consumer) – Grey & finally with the lowest value White (not colorless, they look like milk. usually opaque not often translucent).
The Gem Guide has a section on fancy colored diamonds, although Blue has been removed since rarity and wild price fluctuations make it almost impossible to track.
Richard Drucker ended the riveting evening with discussions of diamond treatments: laser drilled, HTHP, Clarity enhanced coatings, irradiation treated and synthetic diamonds. As well as discussion of Origin Report, variations is valuations from differing labs and the use of the internet for comparable pricing.
Richard urged appraisers and jewelers to fully disclose any treatment to clients. Richard also proposed that we shouldn’t be afraid to say “I don’t know” and have the diamond sent to a laboratory for testing where necessary. Use common sense, because simply asking a client, “How much did you pay?” can also provide a wealth of information about possible treatment. If it was sold well under expected value there is a reason.
World of Gems Conference – Save the date for World of Gems Conference IV to be held on September 20-21, 2014. More information and signup will be available soon at World of Gems Conference IV. New in 2014 will be the opportunity to stay an additional two days (September 22-23) for the National Association of Jewelry Appraisers Mid-Year Conference to be held following ours in the same location
Summary & DCGIA Member Photos by Charles Marts
Photos from slides provided by Richard Drucker
GIA Diamond Color Scale by GIA