De Beers’s Diamond Trading Company (DTC) is sticking to its January forecast that diamond demand will improve markedly in the second half of this year. However, a key DTC executive stressed that the company would “take a conservative stand on prices and supplies for the near-term future.”

Stephen Lussier, manager of DTC’s external relations, noted in an interview that the “industry fundamentals remain quite good, even if the mood isn’t.” Worldwide sales were up 6% to 7% last year, “which is generally good enough to call a year satisfactory.”

He acknowledged that “complex” forces are now working in the market to dampen prospects for diamantaires. “We understand there’s little or no profit on many types of goods these days. Banks have marked their concern by increasing interest rates, while retailers have been hammering dealers and manufacturers on prices. In short, our clients may be doing a lot of business, but they are not making a lot of money.”

The DTC, he noted, “will not sell clients more goods than they need and will hold the line on prices.”

DTC pricing is a complex process that involves much more than the official price list. With thousands of different categories of rough diamonds, each priced accordingly, there is ample latitude to adjust sorting favorably toward clients, or against them. Previously, when industry profits have taken a beating, the DTC often granted clients price breaks on borderline goods to help improve margins.

Lussier noted that the root of the difficulties developed more than a year ago, when diamond dealers and manufacturers began bidding up rough diamond supplies, causing a price bubble. Non-DTC producers, he says, fell in with the boom and began raising their prices as well.

“We told everyone that prices weren’t sustainable, but dealers and manufacturers kept buying anyway – there was a kind of euphoria in the market.”

Inevitably, he said, prices corrected, leaving the industry with a lot of expensive goods purchased with borrowed funds.

While diamond manufacturers and dealers agree that Lussier described the situation accurately, some stressed that the DTC had its own role in creating it – the huge fall 2005 sights put a large amount of inventory into the market and burst the speculative bubble very quickly, giving dealers no time to offload gradually.

The April 3–7 DTC sight totaled about $650 million, filling all clients’ Intentions to Offer (pre-agreed allocations) and giving some the option of taking additional goods. The DTC also took the unusual step of announcing that it would not raise prices this sight, although sightholders observed that the DTC was not giving any price breaks, either. A price increase at the previous sight – averaging 2%, though larger goods were raised at least 5 to 6% – brought a great deal of criticism because mounting debts and a soft retail market have left the industry in a bind.

TRADE: Although business at the March 31–April 5 Baselworld trade fair was better than expected, it may not have been sufficient to cut through the malaise that has set into the market, since most of the problems have been in the middle and lower segments.

Large diamonds and top colored stones reportedly sold well, while the middle market saw much slower sales. Fewer American buyers made the trip this year, and thus most of the demand came from Middle Eastern, Asian, and Russian buyers who were seeking large diamonds and top-quality, untreated colored stones. Luxury brands also did well, according to reports.

There were no obvious fashion or jewelry design trends. Buyers and trade journalists reported that the only consistently fresh looks were from the Italian manufacturers, who created pieces for the World Gold Council’s Gold Expressions collection. Business among these designers was quite strong, despite the fact that gold neared $600/oz. Several manufacturers chose to absorb some of the increased metal price rather than pass it on.

Baselworld is primarily a watch fair, and leading watch companies reported double-digit sales increases this year – particularly in the luxury market and, especially, in diamond-set watches, which have become a top “bling bling” item.

COLORED STONES: The International Colored Stone Association (ICA) is eyeing the fast-growing Chinese retail market. De Beers, the World Gold Council, and the Platinum Guild have been able to win double-digit yearly gains in sales of diamond, gold, and platinum jewelry through extensive marketing programs in key cities. The ICA, hoping to capture some of those sales for colored gemstones, will begin promoting gemstone jewelry there later this year.

However, the ICA has only a fraction of the financial resources of these large organizations, so its marketing and advertising campaigns will certainly be much less in evidence in competing for China’s discretionary yuan.

ICA President Joseph Menzie told Jewellery News Asia, "We have to give Chinese consumers a reason to want to own a colored gemstone product.”

To do that, he explained, the ICA plans to "brand the product" by associating different stones with different life events, in the way that diamonds are linked to love and marriage; building awareness of the value of different types and qualities of stones, so that people feel they are buying something of worth; and working with jewelry manufacturers to bring fashionable colored gemstone jewelry into China.

MACRO: According to an International Council of Shopping Centers–UBS survey, retail sales were up 1.9% in March, much less than the 3.0% gain originally expected. This marked the weakest sales growth since November 2004. The survey is based on same-store sales, or sales at stores open at least a year.

While the ICSC is looking for a strong advance in April, thanks in part to a late Easter, March’s results followed an equally disappointing February, when the ICSC reported a 3.2% gain.

Economic analysts said that while temporary factors like the lateness of Easter and cool weather helped limit March spending, higher interest rates (which make financing debt more expensive) and higher gasoline prices have siphoned funds from consumer wallets. A cooling housing market has also slowed the trend of people taking cash out of their appreciated homes through refinancing and home-equity loans.

For April, monthly chain store sales should rise by 5.0–5.5% over April 2005, said Michael P. Niemira, ICSC's chief economist and director of research.

Russell Shor
Senior Industry Analyst

The Spring 2006 edition of Gems & Gemology, which mails April 17, features groundbreaking articles on “Paraíba”-type tourmaline, lead glass–filled rubies, and tortoise shell, plus the annual G&G Challenge quiz and more.

Leading the Spring issue is “‘Paraíba’-type Copper-bearing Tourmaline from Brazil, Nigeria, and Mozambique: Chemical Fingerprinting by LA-ICP-MS,” by Ahmadjan Abduriyim of the Gemmological Association of All Japan’s research laboratory and co-authors. Remarkably vivid blue-to-green “Paraíba” tourmaline takes its name from the Brazilian state where it was first discovered in 1987, but similar material has also been found in the neighboring state of Rio Grande do Norte, and more recently in Nigeria and Mozambique. This article compares the gemological properties and chemical compositions of copper-bearing tourmalines from these sources. Abduriyim et al. conclude that the “Paraíba”-type tourmalines from Nigeria and Mozambique cannot be distinguished from their Brazilian counterparts by standard gemological testing or semi-quantitative chemical analysis. The laser ablation–inductively coupled–plasma mass spectrometry (LA-ICP-MS) technique, however, yields quantitative chemical data that can be used to establish a specific country of origin.

The second article, “Identification and Durability of Lead Glass–Filled Rubies,” examines a new and increasingly common form of ruby treatment. Testing conducted by Shane McClure and a team of GIA Laboratory colleagues shows that the lead-glass filler is effective at masking the appearance of fractures, but that it can be detected by careful examination with the gemological microscope. While the filler tested was stable to most jewelry repair procedures, it was damaged by exposure to a standard jeweler’s pickling solution and some other common liquids.

In “The Characterization of Tortoise Shell and Its Imitations,” Thomas Hainschwang and Laurence Leggio summarize the gemological properties of this ornamental material. Long used in jewelry and accessories, tortoise shell has become less common with the advent of plastic imitations and the passage of laws protecting sea turtles. It is still seen in antique pieces, however, and proper identification remains imperative. This article compares tortoise shell and its imitations on the basis of standard gemological properties and a variety of spectroscopic techniques.

The Lab Notes column features the latest discoveries from the GIA Laboratory, such as diamonds with “fingerprint” inclusions, inscriptions inside emerald crystals, and color-coated star quartz. The Gem News International section provides in-depth coverage of the 2006 Tucson gem shows and the spectacular variety of materials showcased there. Show highlights include aquamarine from a new primary deposit in Sri Lanka, sphene from Pakistan, and a press conference on Madagascar’s new mining laws.

A special feature of the Spring issue is the annual Gems & Gemology Challenge, a 25-question multiple-choice quiz based on G&G articles from 2005. Successful participants will receive a GIA Continuing Education Certificate and, if they score one hundred percent, recognition in the journal. Only original entry cards from the Spring 2006 issue will be accepted (no photocopies or faxes).

To order the new Spring 2006 issue or to subscribe, click here or contact Circulation Coordinator Debbie Ortiz. Call toll-free 800-421-7250, ext. 7142. Outside the U.S. and Canada, call 760-603-4000, ext. 7142.

Several types of spectroscopy analyze the various ways that a material interacts with light. For example, absorption spectroscopy measures the absorbance by a material at various wavelengths within the ultraviolet, visible, and near-infrared parts of the electromagnetic spectrum. Raman spectroscopy analyzes the scattered light created as a laser beam is passed through a material. These methods are often complementary, as materials that do not exhibit distinctive spectra with one method often do with the other.

The Raman effect was first discovered in the late 1920s by Indian physicist C. V. Raman, who won the Nobel Prize in physics for his discovery. When light interacts with a material, a small amount of energy is lost to vibrational interactions between the material’s atoms, and thus a small percentage (roughly one ten-millionth) of the scattered light will be of lower energy. This is known as the Raman shift because the light is “shifted” to a lower energy.

The scattered light is sent to a detector that scans over a wide range of energy. The Raman shift produces a characteristic spectrum that is used to identify the material. A computer processes the information and displays the spectrum on the screen as a graph. As with infrared absorption spectroscopy (discussed in the previous Insider Gemologist), Raman spectroscopy is usually plotted as wavenumber, which is expressed in reciprocal centimeters (cm^-1), versus intensity of detected light.

Raman spectrometry has been used in gemology since the 1990s, and today most major gem labs have Raman systems. The system uses a microscope to focus the laser’s energy on a gem’s surface, and it can identify fashioned or rough gems.

One advantage over other methods is that the technician can focus the laser on features below a gem’s surface. This makes it possible to identify totally enclosed fillers and inclusions without using potentially destructive techniques. For example, the instrument can identify the solid, liquid, and gas components of a three-phase inclusion located below the polished surface of a fashioned emerald.

Raman spectra of crystalline substances have sharp, consistently identifiable features. Those of less-structured substances such as opal, resins, and oils also have recognizable features, but these are broader.

Gemological researchers began compiling Raman spectra in the early 1990s, when this technology was new to gemology. These researchers created libraries of reference spectra that form the basis of gem and inclusion identification. The gemstones and minerals in these reference spectra all have “fingerprints” that allow them to be distinguished from other materials. Raman spectroscopy has aided gemological research on pearls, opal, corundum and emerald inclusions, emerald fillers, diamond treatments, and numerous other gemstones and minerals. It can even distinguish between diamond and graphite, since the molecular bonds of the two carbon materials are not the same. Raman spectrometry can often help laboratory gemologists identify inclusions or fillers in just minutes.

Step-by-step procedures to identify natural, synthetic, and imitation gems in both rough and faceted form are taught in GIA’s Gem Identification course. Click here for information on this course and other GIA programs.

Over the course of three days, leading researchers and industry experts will address key economic, technological, and geopolitical factors of the industry in the 21st century. Two not-to-be missed sessions, scheduled for Monday, Aug. 28, are previewed below.

See the forest for the trees in “Jewelry: The Changing Landscape.”

It’s easy in today’s fast-paced climate to get preoccupied with the many minute details of everyday business. But keeping such a tight focus means you’ll look up one day to find yourself missing the big picture. From branding strategies and sales incentives to celebrity endorsements and rock star clients, the jewelry industry has changed dramatically – and will continue to change. During this fast-moving, forward-thinking session, fine-jewelry retailer Lee Michael Berg, award-winning designer Steven Kretchmer, Diana Singer of D&E Singer Inc., and fine jewelry and luxury watch designer David Yurman will bring new perspective to today’s latest developments.

Learn how to succeed in colored gemstones in “Colored Stones: Seizing the Opportunities.”

The colored gemstone industry has its challenges. In addition to the lack of a consolidated marketing strategy, the colored gemstone industry is largely dependent on the production of individual mining operations located in remote and sometimes politically volatile countries. In this panel, colored-stone dealer Edward Boehm, Joe Mardhka of ColorMasters Precious Jewelry, the GIA Laboratory’s Shane McClure, and TanzaniteOne CEO Mike Nunn will offer their insights and ideas into overcoming these and many other colored gemstone challenges.

JCK Magazine is the prime sponsor for Monday’s all-day program. For a day-by-day schedule of Symposium events, click here. To register for Symposium and the pre-Symposium Gemological Research Conference (Aug. 26–27), e-mail igs@gia.edu, or click here for more information.

The GIA Museum recently received several important museum pieces from various gem and jewelry enthusiasts at the AGTA GemFair in Tucson.

“With each new trade show, it becomes increasingly clear that members of the industry regard the Museum as an important repository for some of the world’s most unique and precious gems, minerals, and jewelry,” said GIA Museum Director Elise Misiorowski. “This is also apparent from the growing support and the greater caliber and quality of pieces we continue to receive.”

The GIA Museum unveiled its collection of jewelry from Brazil’s top designers and manufacturers during the 2006 AGTA GemFair in Tucson this past February. Throughout the show, collectors and jewelers visited the booth to experience the “Soul of Brazil” exhibit, which will also be displayed in the AGTA Pavilion at the Las Vegas JCK show in June.

“Through displays such as this, we are able to share with the industry and public a variety of collections ranging from fine contemporary jewelry to display-quality gem specimens,” said Patricia Syvrud, G.G., director of In-Kind Gifts for GIA. “Because of the generosity of our donors, we are continually expanding our world-class ensemble of wonderful pieces that can then be shared with many people. We hope the Museum’s collections will both inspire and educate anyone interested in gems and jewelry.”

Recent donors who have contributed to the growth of the Museum include noted gemstone cutters Ed Romack and Dallas R. Hales, jewelry designer Brian Cook, and rare-gem dealers Dudley Blauwet and Chris and Karen Johnston.

Romack and Hales donated the “Cyclops” – an 8,783.5 ct. round, natural quartz with a brilliant cut pavilion and step cut crown.

“The Cyclops is an exceptional addition to the Museum’s Art in Gems Collection, and we are proud to have the opportunity to share this rare piece with the public. It is extremely difficult to cut a gem that size without creating huge windows in the stone, especially when you consider the lack of standard equipment for cutting such large stones,” said Misiorowski.

Cook’s donation, two GemScene™ pendants, exemplifies his proprietary technique of setting gemstones inside quartz to create pleasing natural scenes. These pendants have been added to the Museum’s Signature Collection. Blauwet contributed to the Gem and Mineral Collection with an unusual pink/orange/purple fancy sapphire from the Kurur area of Tamil Nadu, India. The Johnston donation, which will also be added to the Gem and Mineral Collection, consisted of a color suite of eight 6 mm andradite garnets from Tubussis, Namibia.

“In-kind gifts such as these allow GIA to establish and expand its Museum as an educational resource for our students, employees, and the public,” explained Syrvud. “Donations such as Dudley’s and the Johnstons' contribute to our understanding of colored gemstones through GIA’s laboratory research efforts.”

An in-kind donation is a charitable gift of anything tangible, such as a product or service. GIA accepts in-kind gifts of gems, jewelry, and related items that are of educational and historic value to the Institute, the gem and jewelry industry, and the general public.

Other donors who made contributions at the Tucson show include: Gordon Austin, Rui Galopim de Carvalho, Dimitri Mantheakis, Mark Mauthner, Martin Steinbach, Andy Sucki, and Bob Von Wagoner.

For more information about GIA’s collections, e-mail Patricia Syvrud, or call 760-603-4432. GIA’s Museum galleries are open Monday through Friday, 9 a.m.–4 p.m., and are free to the public through scheduled tours. Contact Yvette Wilson, Guest Services supervisor, to schedule a tour: call 800-421-7250, ext. 4116. Outside the U.S., call 760-603-4116.

Carlsbad Event Date Changed to October 27, 2006

Throughout the estimated $120-plus billion worldwide jewelry industry, respected businesses of all sizes and types are looking for the next generation of highly qualified employees. Meanwhile, hundreds of passionate and skilled gemology students, industry newcomers, and established professionals are looking for great organizations to join.

Through the GIA Jewelry Career Fair, the two groups have found each other for the past 15 years. GIA is now in its 16^th year of organizing and hosting this bicoastal event.

“Recruiters value these one-day events because they target a select pool of highly qualified job candidates while being convenient, inexpensive, and effective for the companies,” said Kathryn Kimmel, Career Fair creator and GIA’s vice president of Marketing and Public Relations.

According to Kimmel, more than 80 companies recruited at the Career Fair’s two events last year, which also attracted more than 1,700 career seekers.

“Career Fair is the industry’s single most important recruitment opportunity. The event attracts hundreds of potential employees who not only have the specialized skills companies are looking for, but who also have a passion and commitment for the jewelry industry,” said Kimmel.

“Recruiters can find qualified candidates for nearly every position they offer,” she added.

On the East Coast, the 2006 GIA Jewelry Career Fair will be held just prior to the JA Summer Show at the Jacob K. Javits Convention Center on Friday, July 28, in New York from 9 a.m. to 3 p.m.  On