I recently read an article in the April 2004 issue of Inc. magazine about Jeff Bezos, the founder and CEO of Amazon.com. In it, the author stressed optimism as essential to success. He also stated that we don't choose our passions; rather, our passions choose us.

In the article, Bezos joked that "in the case of Amazon.com, half of it (his success) was good timing, half of it was luck, and the rest of it was brains." Bezos may have been clever and overly modest in his statement, but there was also a lot of truth to his words. As the adage goes, “The harder people work, the ’luckier’ they seem to be.” Bezos worked hard, had good timing, kept his optimism, and followed his passion. His example may be the perfect model for the rest of us.

What is your passion? Is it gems or jewelry? Is it starting your own business? Is it sales, or the more technical side of things? Whatever your passion, you should let it guide your direction in life. As another popular adage goes, "If you love what you do, you'll never have to work a day in your life."

For several months in 1995, Jeff Bezos worked tirelessly to raise $1 million to fund the start-up of Amazon.com, ultimately from 22 "angel" investors. This was well before the dot.com craze of the late 1990s, when a simple phone call could potentially raise tens of millions for any Internet enterprise. As we know now, many of those ventures failed, not because they weren't good concepts, but often because people were trying to catch a wave instead of following their passion. At the end of the day, we need to love what we do so much that it doesn't feel like work. It needs to be fun. It needs to be our passion.

In the jewelry trade, many of us have found our passion, or at least are very close to it. For we work in an exciting industry, full of romance and mystique, where we offer beautiful items of adornment to people for very happy occasions. Most of us have friends outside the trade who envy our situation because they are often miserable in what they do. They haven't followed their passion. They simply followed an opportunity that they don't love.

My encouragement to all is to work hard, stay optimistic, and follow your passion. When we do this, we are happier people, destined for achievement and success.

Demand for high-end pieces – especially large diamonds – helped many of the 2,186 exhibitors at Baselworld 2004 report their strongest show in four years. Exhibitors also noted that buyers came from all parts of the world, in contrast to 2003, when the severe acute respiratory syndrome (SARS) outbreak and the war in Iraq kept many Asian and American buyers away.

The biggest news of the show, which ran from April 15 to 22, was big diamonds – 3 cts. to 50 cts. Demand for such stones was so high that several dealers noted privately that they raised prices a few percentage points on top-quality diamonds as the show progressed.

“We felt we could ask for more because buying was strong and Aber announced a 4% [rough] price increase one day after the show opened,” said one European dealer.

Several diamond dealers in the posh designers’ hall reported selling “significant” 20 ct.-plus colorless and yellow diamonds.

“Demand was up across the board – from every world market,” said Vartkess Knadjian of Antwerp diamond manufacturer Backes & Strauss. “The Far East has picked up nicely following the problems of last year,” he added, noting that many buyers who approached him at the show were other diamond dealers looking to bolster their inventories of top-quality goods.

Polished prices are “heading quickly northward,” Knadjian said, because “there’s a realization that there are fewer and fewer [high-quality] diamonds in the market.”

Richard Lewis, European sales manager for Israeli diamond manufacturer Schachter & Namdar, also noted that “competition for high color and clarity goods between one and three carats” was especially strong.

While many dealers welcomed the price increases after more than two years of stagnation and dwindling profits, some worried about “a whiff of speculation in the air” because the increases have come so rapidly.

"All this talk of shortages will disappear once goods reach a certain price,” said one American dealer who did not want to be identified.

The declining U.S. dollar is also pushing up prices for American and Hong Kong buyers (since the H.K. dollar is pegged to the U.S. dollar). However, because diamonds are traded in dollars, their cost in Europe and countries not on dollar-based currencies has actually fallen in some cases.

Those who believe that supply shortages are authentic point to the increasing numbers of Indian, Russian, and Chinese buyers at the show and to the growth potential in those markets. In addition, luxury watch brands such as Franck Muller and Cartier have been adding many more diamond lines.

“The watch companies are consuming a great deal of diamonds today,” noted Knadjian, who believes they are taking some business from jewelry manufacturers, especially in the top end of the women’s self-purchase market.

At the lower end, the sinking U.S. dollar and rising prices for small diamonds caused a number of manufacturers to use some ingenuity to keep prices within the range of mass merchandisers. Sun Jewels of Mumbai, for example, assembled one- and two-point diamonds in clusters of seven to replace ten pointers in finished jewelry pieces.

This way, said director Kapil Nevatia, “we do not have to resort to lowering the quality of the diamonds in our pieces.”

At the highest end, sales of colored diamonds – especially pinks and top-color yellows – were very strong.

“The best show we’ve had in five years,” said Shreyash Mehta of M. Vainer, London. “Hong Kong is strong, and even Japan is coming back into the colored diamond market.”

European demand for colored diamonds has been fueled by a recent flurry of news stories on the ₤1 million pink diamond that British soccer star David Beckham gave his wife Victoria (formerly Posh of the disbanded Spice Girls), said Mehta.

Prices for top-market pearls firmed after a strong Basel show, though some of those increases also can be chalked up to the weak U.S. dollar. Dealers believe that the Basel event heralds an end to the years-long slump in demand.

In South Sea cultured pearls, baroque shapes and unusual colors were popular at the show, said Pinella Autore of Australia Pearls, Sydney.

“Buyers were looking for something distinctive that their clients didn’t already have.”

Suppliers of Tahitian black cultured pearls say they have tried to absorb the premium in their currency (the Pacific franc) against the U.S. dollar to keep their products attractive to the U.S. market.

Martin Coeroli, general manager of Perles de Tahiti, French Polynesia , said demand for strands is rebounding on the strength of a revival of the 1950s “Grace Kelly/Audrey Hepburn” looks. Brown cultured pearls from Tahiti are also becoming popular, he said.

Demand for colored stones at Basel was mixed. Buyers sought untreated (with lab reports) rubies, sapphires, and emeralds at the top end, as well as significant pieces in branded jewelry. For the more fashion-oriented, pastels were definitely in.

“Buyers are looking for gemstones that normally are not treated, such as Mandarin garnet [the trade name for bright orange spessartine from Namibia] and peridot. Or they want goods where we can document their [untreated] origins,” said Alexander Wild of Wild & Petsch Lapidaries, Kirschweiler, Germany, referring to popularly priced stones that are rarely sent to labs.   

The international pavilion, which last year had been relocated 60 miles away to a hall outside Zurich, was back near the main fair site this year. In addition, the Hong Kong exhibitors, who had been barred from the show altogether last year because of the SARS epidemic, returned with 333 exhibitors. This was nearly double the 2002 contingent.

Although traffic to the pavilion was fairly high, and the Hong Kong group had the prime spot in the building, not everyone was pleased.

B. K. Chow, president of the Hong Kong Jewellery Manufacturers Association, said the established companies generally did well, but the separate location (about a half-mile from the main fair halls) did limit traffic, resulting in slow sales for many of the newer exhibitors.

Exhibitors in the international hall complained of steep price increases for space over 2002, when they were still lodged in the main part of the fair.

“It cost more than 25% over 2002’s rates to be in this hall,” said Chow.

Companies in other national sections complained of a lack of signage to mark borders between them, and that every section except the Thailand exhibit looked alike.

Others, however, had praise for their experience in the new hall. Jacques Prades, of Gamma Creations, Thailand, said he was “surprised by the traffic. We’ve had Americans, Japanese, Europeans – everybody – come see us. Last year, we had only a couple of buyers through the entire show.”

Baselworld also hosted a number of seminars.

Diamond Trading Company
The De Beers Diamond Trading Company (DTC) event focused on marketing and branding, with top British retailer Michael Wainwright of Boodle & Dunthorne relating how sales tripled after his firm revamped its image, inventory, advertising, and stores. Dominique Assenat of Peclers, a Paris-based marketing consultant, explained that the concept of luxury was spreading to younger people, who tend to place greater emphasis on fashion, while Rosy Blue’s CEO Dilip Mehta announced that his company had just signed an agreement to produce a jewelry line for bridal fashion guru Vera Wang. Jonathan Kendall, DTC international and trade marketing group director, noted that more than 33% of the DTC goods sold at its sights are dedicated to programs that drive demand. Jonathan Pudney, DTC’s marketing director of brand communications, stressed that consumer confidence will be the key to future sales growth for diamond jewelry.

Challenges to that confidence include new synthetics and treatments, and conflict issues, he said, noting that “consumers now ask whether their diamonds are ethically produced, real, and sold at a fair price.”

Dominic Brand, DTC’s regional marketing director, noted that sales of three-stone jewelry have increased strongly in major markets including the U.S., Europe, and now, Japan, where it is a self-purchase item.

GIA GemFest Basel
The annual GIA GemFest Basel started with Shane McClure, director of West Coast Identification Services for the GIA Gem Laboratory, reviewing the details of the Institute’s research into sapphires with unusual color zoning that have entered the market recently. After a great deal of scrutiny, GIA and other researchers concluded that these goods have been subjected only to standard heat treatment. He also reviewed identification features of synthetic diamonds produced by the chemical vapor deposition (CVD) process, and a new line of HPHT-grown synthetic diamonds from Chatham Created Gems.

Following McClure’s presentation, GIA Gem Laboratory Chief Executive Officer Tom Yonelunas and Vice President of Identification and Research Services Tom Moses introduced the latest findings in GIA’s diamond cut research project, which will ultimately be incorporated into a cut grade system. Diamond appearance, said Moses, is a “mosaic” of brightness, fire, and scintillation. Scintillation, in turn, is much more than “sparkle,” and includes “pattern,” which is the effect caused by light and dark areas from internal and external reflections. Yonelunas said a cut grade system would be based on these appearance factors, plus physical characteristics such as girdle thickness and weight-proportion ratios, and finish, polish, and symmetry.

In the panel discussion that followed, Rosy Blue CEO Dilip Mehta said that the GIA system acknowledges the fact that the term “excellent” cut means different things to consumers in different parts of the world.

Ephraim Zion, managing director of Dehres International, Hong Kong, said he “hopes the GIA system dispels the notion there is only one ideal cut.” For example, he said, “In Hong Kong, people want tables of 62% to 65%,” while others say 55% to 57% tables are the only ones that will get a high grade. “Regional preferences will remain, but the GIA system will strengthen consumer confidence that various proportions can look good and receive an excellent grade.” 

Peggy Jo Donohue, editor-in-chief of Professional Jeweler, said that “educated retailers” will hail the new system because it offers the opportunity for them to “tell a story to their customers.”

Natural Colored Diamond Association
A new trade organization, the Natural Colored Diamond Association (NCDIA), held an in-show press conference. The purpose of NCDIA, said founding member Dilip Mehta, is to raise consumer awareness of natural colored diamonds.

Nigel Jones, general manager of marketing for Rio Tinto Mining, noted that $3 billion, or 7% of diamond jewelry sold last year by value, contained colored diamonds.

The NCDIA promoted colored diamonds at the recent Academy Awards ceremony. In addition, one major Japanese company, Kashikey, has begun a campaign promoting brown diamonds.

Auctions
Diamonds paced Christie’s April 19–20 Magnificent Jewels auction in New York. The sale brought in $20.35 million, 70% sold by lot, 78% by dollar amount.

“Diamond prices were exceptionally strong, with aggressive international private collectors and trade international buyers competing heavily in a market where important stones are extremely scarce,” said Simon Teakle, head of jewelry for Christie’s America. “London jeweler Laurence Graff bought a 51-ct. D-flawless diamond, which enabled him to match another stone from his inventory, making an exceptionally rare pair.”

However, that sale, held the day before the Sotheby’s April 21^st Magnificent Jewelry auction in New York, seemed to have absorbed much of the dealers’ appetite and funds for large diamonds, as Sotheby’s results fell far short of rival Christie’s. It appears that the market, while strong, does have limits. Sotheby’s reported strong prices for top-name jewelry pieces (such as Cartier and Van Cleef & Arpels), but the significant diamonds failed to find bidders.

Russell Shor
Senior Industry Analyst

A client recently submitted a black bead necklace to the SSEF Swiss Gemmological Institute for identification. He had purchased a number of these necklaces from a Chinese supplier, who represented them as black coral. The client became concerned when testing by another lab indicated the material was plastic.

The necklace contained 27 beads, each measuring 14 mm in diameter (see figure). The specific gravity (determined hydrostatically on one bead) was 1.325, and the refractive index was approximately 1.56. Both of these values are consistent with those expected for black coral.

Black coral (also called horn coral) typically shows characteristic curved growth lines and concentric cracks that are oriented parallel to the long axis of the branches. These features were not present in the beads of the necklace. However, scattered reddish brown reflections were apparent, as is typical for black coral, and linear arrays of tiny holes or spots were seen on some of the spheres. A dark-gray surface color was seen with strong fiber-optic light, and minute bubbles were found sporadically. It became clear that instrumental analysis would be necessary for a proper identification.

Energy-dispersive X-ray fluorescence spectroscopy of a few of the beads revealed characteristic elements for black coral: chlorine, bromine, and iodine. A Fourier-transform infrared spectrum of one of the beads was compared to a reference spectrum of black coral, and the peaks showed full agreement. However, a Raman spectrum from the surface of one of the beads showed a 1605 cm^-1 peak, indicating the presence of a polymer.

The laboratory informed the client that the beads were identified as black horn coral coated with an artificial substance, and asked for permission to cut one of the beads in half. In cross-section, the extent and result of the treatment could be clearly observed. A coating consisting of several very thin layers covered the surface of the beads. Fissures and cracks were sealed by the artificial resin, creating a very smooth appearance, which explained the lack of surface structures that are typical for black coral. This example demonstrates, once again, how only a combination of tests can safely identify the nature and treatment of gem materials.

This entry was prepared by Dr. Henry A. Hänni of the SSEF Swiss Gemmological Institute, Basel, Switzerland. For more updates from around the world, read the Gem News International section of the upcoming Spring 2004 issue of G&G. To subscribe, click here, contact Circulation Coordinator Debbie Ortiz, or call toll-free 800-421-7250, ext. 7142, or fax 760-603-4595. Outside the U.S. and Canada, you can also call 760-603-7142.

Kunzite, the pink variety of spodumene (left), turns green after irradiation (right). The stones will fade back to pink after exposure to light and heat.

Many types of gemstones are irradiated (exposed to radiation) to improve their color appearance. For example, white topaz is routinely irradiated to a brown color, and then heated or annealed to an attractive blue color. Virtually any gemstone may be irradiated, but the results (and permanence of any changes) will vary. Unfortunately, irradiation is often undetectable, even with special training and equipment. This is because the changes induced by radiation are often identical to those that may occur naturally.

The colors of some irradiated gems, such as blue topaz, pink tourmaline, smoky quartz, and golden beryl, are stable under normal conditions of wear. In many cases, however, irradiated color tends to fade when the gem is exposed to heat and light. This is often the only means of detection.

Such color fading makes irradiation impractical for many stones. Although irradiation can create a Maxixe-like blue color in colorless to light-pink beryl, the treated color quickly fades (as it does in the natural material). Fading also affects the intense green irradiated color of some spodumene, as well as some green topaz, and the intense yellow-to-orange color produced from pale sapphires.

Sometimes sellers market irradiated gems without disclosing that their intense color is only temporary. A temporary radiation-induced color can be detected by conducting a simple fade test (with, of course, the permission of the gem’s owner). First, expose the suspect gems to the light of a 250-watt bulb for 24 hours. Place the gems close enough to the bulb that they are also affected by its heat. If the color is stable, it will not fade during the test. However, since heat and light can also affect the color of some naturally colored gems, such as amethyst, rubellite, and kunzite, fade tests should not be performed on these stones.

Radiation can create a gray-to-black appearance in both saltwater and freshwater cultured pearls. In saltwater cultured pearls, the process darkens the bead nucleus; examination of the drill-hole with magnification may reveal a dark-colored bead beneath more transparent, nearly colorless nacre. With freshwater cultured pearls, irradiation will darken the nacre, giving it an unnatural metallic sheen and strong orient that make the pearl look artificial.

The process of irradiation sometimes induces residual radioactivity, but in almost all cases of commercially treated gems, this effect will fade rapidly. However, gemological laboratories occasionally come across irradiated stones that still have detectable levels of radioactivity. For example, cat’s-eye chrysoberyl may be irradiated to an intense honey color, but some of these stones have proven to have harmful radiation levels. Certain other gems may remain radioactive long after treatment depending on their trace-element composition, but such stones are quite rare.

To learn more about irradiated gemstones, consult the GIA Colored Stones and Gem Identification courses. Click here for information on these courses.

GIA Instruments UK Limited is now offering DiamondSure and DiamondView – two state-of-the art devices manufactured by the Diamond Trading Company (DTC), part of the De Beers group of companies – to detect synthetics and diamond simulants.

Changes over the last few years in synthesis technology and its use have increased the need for rapid and accurate identification of synthetics.

DiamondSure is a rapid screening instrument, simple to use, and all stones passed by DiamondSure are guaranteed to be natural diamonds.

DiamondView, a significantly more sophisticated instrument, unambiguously differentiates natural diamond from its imitation and synthetic counterparts, using surface fluorescence and phosphorescence techniques.

Howard Pomerantz, managing director of GIA Instruments UK Limited, said, “We’re very pleased to be able to offer these two important instruments to screen for and detect synthetics. We’re confident they will greatly assist gemological laboratories and many others throughout the industry.”

Pomerantz pointed out that while the initial production will largely be aimed at gemological laboratories, all orders are welcome, and they will be filled as more of the devices are produced.

“We’re glad to see the implementation of this important technology for distinguishing synthetics,” said Dr. James E. Shigley, director of Research for GIA. “This has been an ongoing objective for GIA, especially in view of the recent increase in awareness of synthetics, and the heightened interest in their detection, by both the industry and the public.”

Shigley also noted, “In recent months, we have seen more interest from the media in synthetics, than for any other gem issue. By offering DiamondSure and DiamondView, we’re trying to better serve the industry and the public and increase their confidence in the goods they are buying and selling.”

Orders may be placed by e-mailing GIA Instruments UK Limited^TM, or by visiting the GIA Instruments UK Limited^TM website.

April 19, 2004

DiamondSure™ and DiamondView™  are used under license from The Diamond Trading Company Limited. DiamondSure™ and DiamondView™ are developed by The Diamond Trading Company Limited and supplied by GIA Instruments UK Limited™.