AUCTIONS: The top end of the market keeps on rolling. Christie’s reported a stellar April 11 auction in New York, where an incredible 92% of the lots sold, representing 96% of estimated value. In all, the 308 lots sold brought over $39 million. Customarily at a major jewelry auction, only 75% to 80% of the lots sell.

All of the top ten lots were diamonds. The costliest stone, a 50.53 ct. D-Internally Flawless pear shape, sold to a private buyer from Asia for $4.16 million, or $83,450 per ct. A Middle Eastern buyer bought the second lot, a 50.67 ct. D-VVS₂ pear shape, for $2.59 million, or $51,150 per ct. A Fancy Intense yellow pear shape of 42.13 cts. sold for $2 million, or $48,200 per ct., to a European buyer, while a 3.17 ct. Fancy Intense blue rectangular cut went to an Asian buyer for just over $1 million, or $319,500 per ct.

Sotheby’s New York April 25 sale included the 107.46 ct. Fancy yellow Rojtman diamond, which brought $1.9 million, and a 39.14 ct. Fancy Intense yellow diamond, which sold for $1.024 million. One sale surprise was the 65.57 ct. Fancy Dark orange-brown pear-shaped Golden Maharaja diamond, which brought nearly $1.4 million against an estimate of $400,000 to $600,000.

The Sotheby’s sale realized $17.5 million, 76% by lot, 91% by value, demonstrating the strength of the top end of the market.   

RETAIL: The luxury side of retail has seen an upsurge outside the auction room as well, as demonstrated by Richemont’s very strong fiscal 2006, which ended March 31. Sales were up 17% to $5.33 billion, well above forecasts. The Zurich-based group owns some of the world’s best-known brands, including jewelers Cartier and Van Cleef & Arpels and watchmakers Piaget, Baume & Mercier, and Jaeger Le Coultre.

Group jewelry sales rose 15%, largely on the strength of Cartier. Watch sales, however, soared 22%. A company spokesperson quoted by Reuters said, “Group revenues grew most strongly in the Americas, where sales rose 26%, [accounting] for 20% of group sales. European sales, which account for 42% of group sales, rose 15%.”

DIAMONDS: Angola’s diamond mining and marketing agency, Endiama, announced it will produce 10 million carats this year, compared to 7 million carats in 2005 and 3.5 million carats in 2004. Reuters, quoting Sebastião Panzo, Endiama’s communications director, reported that the Catoca mine alone is expected to produce 8 million carats in 2006, twice last year’s figure, and that a second processing plant has been opened there.

Catoca is operated by Russia’s diamond mining and marketing agency, Alrosa, which reported record sales of $2.86 billion last year, up 15% from 2004, according to its recently released annual report. Alrosa’s profit was $540 million, which includes returns from the Catoca operation.

Alrosa CEO Alexander Nichiporuk noted that the value of Russian mine production grew by 4.2% in 2005, to $2.3 billion: Udachny, $861 million (approximately 38% of the total); Nyurba, $529 million (23%); Mirny, $481 million (21%); Aikhal, $348 million (15%); and Anabar, $41 million (2%). 

MACRO: Although a recent NBC poll showed that nearly half of U.S. consumers have been stung moderately or severely by high gasoline prices, consumer confidence just hit its highest point in nearly four years.

The Conference Board reported April 25 that its consumer confidence index soared to 109.6, up from a revised 107.5 in March. The April number is the highest since the index reached 110.3 in May 2002. Analysts had expected a reading of 106.4.

Lynn Franco, director of The Conference Board Consumer Research Center, noted, “Recent improvements in the labor market have been a major driver behind the rise in confidence in early 2006. However, while prices at the pump have yet to impact confidence, further increases could dampen consumers’ mood.”

Although inflation has been accelerating, the Federal Reserve may be holding the line on interest rates for the short term, according to reports. This will be good news for the diamond trade, which is struggling against rising costs and increasing debt.

Minutes of the Federal Reserve’s March 27–28 board meeting showed the nation’s top bankers grappling with a dilemma: Slow the economy by raising interest rates and risk a downturn, or hold the line and hope inflation doesn’t roar out of control. The Fed’s board agreed to end the tightening process – while keeping a watch on inflation.

Is Japan due for a rebirth? Twenty years ago, the country began a boom that saw a major surge in demand for diamond jewelry – by the end of the 1980s, Japanese consumers matched their American counterparts on diamond purchases. Within two years, however, the bubble burst, leaving Japan engulfed in red ink and its consumers dispirited. Since then, the country’s economy has stagnated, and diamond jewelry sales have fallen to about half their 1990 levels.

However, a recent government report noted that consumer confidence in Japan had risen to levels not seen since March 1991, as employment outlook, home equity, and stock market prices seem to be rising in earnest.

Russell Shor
Senior Industry Analyst

The GIA Diamond Cut Grading System considers many aspects of face-up appearance and overall diamond cut quality to determine a final cut grade. Variations in the brillianteering of the upper and/or lower half facets (also known as girdle facets) can significantly affect face-up appearance. Such variations are assessed for every D-to-Z standard round brilliant diamond that is sent to the GIA Laboratory and are included in the determination of that diamond’s final cut grade. While we discussed this aspect of brillianteering in a previous article, here we will provide additional illustrations that can be used to visually assess allowed levels of “painting” and/or “digging out” for each cut grade.

Previously, we discussed how these methods may be used to save weight when fashioning a polished diamond, to remove clarity characteristics that are located near the girdle, or even to deliberately affect the face-up appearance in a particular way. In addition, these methods may be used singly or in combination, on the crown or on the pavilion, or both.

Painting and digging out move the half facets in a three-dimensional way. The relative positions of the facets change, their angles to the horizontal change, and their distances from the center of the round brilliant change. As a result, the girdle edge at the half-facet junctions can become thicker or thinner relative to the girdle edge at the bezel-main junctions.

The most direct way to visually assess the level of painting and/or digging out on a round brilliant is to examine the girdle profile of the diamond. In a standard round brilliant diamond, the girdle “hills” where the bezel facets meet the pavilion main facets should be roughly equal in thickness to the girdle “hills” where the upper and lower half-facet junctions meet (figure 1). In a painted diamond, the area of the girdle where the upper and lower half-facet junctions meet is thicker than the bezel/main location (figure 2). Conversely, in a dug-out diamond, the area of the girdle where the upper and lower half-facet junctions meet is thinner than at the bezel/main location (figure 3). Although particularly shallow or steep proportions can affect the apparent difference in girdle thickness, examination of the girdle profile provides a good assessment of brillianteering variations across the broad range of common round brilliant proportions.

Consistent with the five categories in the GIA Diamond Cut Grading System, we have divided into five levels the extent of painting and/or digging out possible on round brilliant diamonds. The illustrations in figures 4 and 5 (to download a larger pdf of these images, click here) show examples of the approximate extent of painting and digging out allowed for the top four cut grade categories as represented by the girdle profiles.

However, one should also be aware that deviations from the expected symmetry of a round brilliant can sometimes interfere with the evaluation of painting and digging out by examination of the girdle profile. Misalignment between crown and pavilion, uneven crown height, uneven girdle thickness, and/or uneven pavilion depth are particular causes for concern, as these faults can either obscure the girdle changes due to painting or digging out, or make them look more severe (figure 6). Naturals and extra facets that change the girdle shape also make it more difficult to assess brillianteering variations (figure 7).

Although we have found that painting and digging out affect the cut grades of only a small percentage of diamonds submitted to the GIA Laboratory, they are a factor in the GIA Diamond Cut Grading System and individuals should familiarize themselves with these brillianteering methods. When used in conjunction with one of the GIA Facetware™ applications (such as the free online Cut Estimator or the Facetware Database as embedded in non-contact measurement devices), the assessment method and examples presented here should provide a comprehensive approach to predicting and understanding the cut grade of any standard round brilliant diamond.

For more information about the GIA Diamond Cut Grading System or to access the GIA Facetware Cut Estimator, click here. To download a pdf of this article with high resolution images, click here. 

In January of 2006, GIA Education began teaching students how to estimate the cut grade of a standard round brilliant diamond. This coincided with the release of the new GIA Diamond Grading Report and Diamond Dossier®, both of which now include a cut grade. Cut grade estimation is being taught in On Campus in Diamond Grading classes and Distance Education Diamond Grading Lab sessions, as well as in seminars.

The GIA Diamond Cut Grading System applies to the most important commercial cut – the standard round brilliant – in all clarities across the D-to-Z color range. There are five cut grades: Excellent (Ex), Very Good (VG), Good (G), Fair (F), and Poor (P).

GIA Education’s goal is to teach the student gemologist to estimate the cut grade consistently within a one-grade tolerance. Cut-grade estimation uses visual observation to judge the diamond’s optical attributes of brightness, fire, and scintillation, then combines those observations with proportion estimates and polish and symmetry rankings. Charts in the new GIA Diamond Grading Lab Manual give proportion, polish, and symmetry parameters to guide the student toward a final cut-grade estimation.

By learning these visual and proportion estimation techniques, students gain real-world skills. They can confidently explain cut grades and diamond appearance to customers, and can evaluate cut when buying or appraising diamonds.

For sales associates/gemologists, the GIA Diamond Cut Grading System provides an easy-to-understand way of explaining why a diamond looks the way it does. It provides the vocabulary needed to clearly communicate a diamond’s cut quality to customers, and lets sales associates talk about the romance and beauty of diamonds while also discussing cut precision. These skills can help them sell more diamonds.

The GIA Diamond Cut Grading System considers both global and individual preferences. Some consumers prefer bright diamonds, while others prefer more fire. Some like to see particular patterns in a diamond’s face-up appearance. The system also represents a consensus: Not many people like diamonds in the lower cut grades, while almost everyone likes diamonds in the two top grades.

In the next few Insider articles, the Insider Gemologist will look at specific visual observation skills and proportion estimation techniques used by GIA Education to estimate the cut grade of a standard round brilliant diamond.

Step-by-step procedures to judge and grade the color, clarity, cut, and carat weight of diamonds are taught in GIA’s Diamond Grading course and Diamond Grading Lab class. Click here for information on these and other GIA programs.

Gems & Gemology is pleased to announce the winners of this year’s Dr. Edward J. Gübelin Most Valuable Article Award, as voted by the journal’s readers. Thanks to the generosity of the late Dr. Gübelin, the authors of these three articles will share cash prizes of $2,000, $1,000, and $500, respectively. Photos and brief biographies of all the winning authors are featured in the new Spring 2006 issue of G&G, available now.

First place went to “A Gemological Pioneer: Dr. Edward J. Gübelin” (Winter 2005), by Robert E. Kane and a team of five co-authors. This 30-page tribute reviewed the Swiss gemologist’s prolific career and groundbreaking contributions. It featured dozens of archival photos, an illustrated timeline, and a two-page supplement on Dr. Gübelin’s many books. Mr. Kane is president and CEO of Fine Gems International in Helena, Mont., and a regular contributor to the journal.

Receiving second place was “Characterization and Grading of Natural-Color Yellow Diamonds” (Summer 2005), by John M. King and GIA colleagues. Using data on more than 24,000 samples examined by the GIA Laboratory during the years 1998 and 2003, this study explored the color grading of yellow diamonds at the GIA Laboratory and reported on their gemological and spectroscopic properties. Mr. King is technical director of the GIA Laboratory in New York and a frequent writer and lecturer on colored diamonds.

Third place was awarded to Russell Shor’s “A Review of the Political and Economic Forces Shaping Today’s Diamond Industry” (Fall 2005). This article summarized the key developments and events, from mine to retail, that have radically transformed the global diamond industry in recent years. Mr. Shor, a journalist who has spent more than 20 years covering the diamond trade, is senior industry analyst at GIA in Carlsbad, Calif.

Order the entire 2005 set and save $12 off the back issues list price. To order these issues 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.

On April 8, the San Diego Mineral and Gem Society and GIA hosted the fourth annual John Sinkankas Symposium at the Institute’s headquarters in Carlsbad, Calif. The topic of this symposium was phenomenal stones.

“Through the annual Sinkankas Symposium, we are able to bring both gem experts and neophytes alike together for a day of learning. We are proud to be part of an event that continues to ignite and expand people’s passion for gemstones,” said Dona Dirlam, director of GIA’s Richard T. Liddicoat Gemological Library and Information Center.

The sold-out event brought gem and mineral experts, master cutters, and gem and jewelry photographers and writers together for a day of insightful lectures about phenomenal stones. In gemology, the term phenomena refers to special optical effects such as chatoyancy, asterism, adularescence, change-of-color, and play-of-color that add to the visual appeal of a gemstone. Topics of the day included photographing, collecting, cutting, and evaluating phenomenal gemstones.

Featured lectures were given by noted gem expert Si Frazier; Dr. George Rossman, a professor of mineralogy at the California Institute of Technology; John Koivula, AGTA’s chief research gemologist; Fred Ward, author and photographer; and Robert Weldon, GIA’s Photography and Visual Communications manager. Meg Berry, Dr. Gene Meieran, Bill Larson, and Jo Ellen Cole also gave presentations.

“The Sinkankas Symposium on phenomenal stones comes at an important time when jewelry manufacturers and designers are looking for something different – in other words, not repeatable. And that is what phenomenal stones are – one-of-a-kind. With these gems, designers are provided with the opportunity to be completely creative and phenomenal in their own way,” commented Robert Weldon, who lectured on photographing phenomenal gemstones.

Attendees were also treated to several exhibits of fine phenomenal gemstone pieces. Among the exhibits was a six-foot-tall case with over 200 rough and cut phenomenal gems provided courtesy of Bill Larson and Pala International. A number of Meg Berry’s fine opal carvings were also on display. During her lecture on cutting phenomenal gems from rough, Berry presented slides depicting the various stages of the carving process. Many of the carvings in her exhibit were the finished products of opals shown in her presentation. Also, Berry gave free samples of star sapphire rough to all attendees following her talk.

“The seminar was a wonderful mix of scientists, collectors, cutters, and photographers who each provided firsthand insight into a specific aspect of these special gems,” said GIA Museum Curator Terri Ottaway. “I came away with a whole new appreciation of the causes of the optical phenomena and the difficulties cutters and photographers face when dealing with them.”

Added Roger Merk, founder of the John Sinkankas Symposium, “An extraordinary slate of speakers brought the fourth annual Sinkankas Symposium to life. Each speaker provided a well-illustrated presentation that was entertaining, informative, and authoritative.”

Merk created the symposium to honor the memory of his good friend John Sinkankas, a renowned mineral collector, gemologist, and author. Past symposium topics have included quartz (2003), tourmaline (2004), and beryl (2005). The 2007 event topic will be jade.

In only four short months, Aug. 27–29, it will be time for the 2006 International Gemological Symposium. To get you in the Symposium spirit, the GIA Insider offers special insight into some of the daily events being held.

Don’t miss Monday’s presentation, “Diamonds: Mapping the Future.”

Elliot Tannenbaum. Martin Rapaport. Martin Irving. Lawrence Ma. Glenn Rothman. These experts will provide an in-depth overview and international perspective on the future of the diamond industry. They’ll address the changing landscape of the industry, the shifting balance of power, the emergence of new sources, and how you can chart a successful course of action with new markets and new marketing techniques.

Dive into the world of cultured pearls during Tuesday’s “Cultured Pearls: Harvesting Profits.”

With greater selection, variety, and quality, today’s cultured pearls are better than ever, and the popularity of cultured pearl jewelry continues to grow. But reports are surfacing about the decreased production of some types of cultured pearls. And treatments are an ongoing concern. During this morning session, Meyer Hoffman of Mikimoto (America), Nick Paspaley of Paspaley Pearls Group, Ken Scarratt of GIA Research in Bangkok, Joel Schechter of Honora Industries, and Robert Wan of Tahiti Perles will delve deep into the world of cultured pearls and give you an insider’s perspective on everything from production and profits to trends and treatments.

JCK Magazine is the prime sponsor for Monday’s all-day program, and SAFDICO USA Inc. is the prime sponsor for Tuesday’s all-day program. For a day-to-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.