In recent weeks you have read, and I hope benefited from, a new column in GIA Insider written by our Senior Industry Analyst, Russell Shor. Shortly after Russ joined the staff a few months ago, he began writing a weekly economic and business report for our executive team. It was so rich with information and educational value that we asked him if he could refine and summarize his research and analysis into a column for our online readership. What emerged is his now-regular column in the Insider, which may initially have come as a surprise to some of our readers.

After all, GIA is famous for practicing, teaching, and researching the science of gemology, but not necessarily for its analysis of economic and business issues. Yet we at the Institute have long been broadening the base of our activities to fulfill our mission as educators to the world’s gem and jewelry professionals. While gemology will always remain our core focus, we have seen the study of gemology itself broaden into a social, as well as a hard, science. As a hard science, gemology is primarily concerned with the physical and optical properties of gems, how they are formed, and how they are treated or synthesized.Yet gemology also involves the geopolitical regions where gems are found, the lapidary arts by which they are fashioned, the economics of the times in which they are being sold, and the marketing techniques used to get them to the ultimate consumer.To understand gemology as a social science, we must also understand the economic, sociological, political, and business aspects of the study of gems. In sum, understanding the importance of conflict diamonds and return on investment is as vital to a gemologist as understanding HPHT treatment and new synthetics.

In researching for this message, I was reminded of GIA Chairman Richard T. Liddicoat’s now-famous editorial in the Fall 1988 issue of Gems & Gemology. So important is his message that I wanted to share with you some of his wise words. Richard T. Liddicoat said, “ . . . today . . . the study of gemology is more than refractive indices and specific gravities; it goes beyond synthetics and simulants, localities and Leveridge gauges. Gemology is now a truly interdisciplinary profession, requiring a good balance of the technical, aesthetic, and commercial aspects of gems. Today’s professional gemologist cannot function in a vacuum. A competent gemologist must be able not only to identify and evaluate gemstones, but also to judge the effectiveness of the design, workmanship, and quality of the jewelry in which the gems are set. Today’s gemologist must know business management, salesmanship, and a variety of other subjects that are not strictly gemological in nature.

“Most contemporary gemologists are not just scientists, but are deeply involved in the gem and jewelry industry as a business. To such individuals, knowledge of world economic conditions, currency relationships, trade balances, and other factors that impact the gem trade is essential if they are to succeed in this highly competitive field.  To be fully effective in their vocation, modern gemologists must be well-rounded – and well-informed.”

As you read Mr. Liddicoat’s words, I’m sure you thought, as I did, that his message is as current and relevant today as it was then.

My point in all this is to emphasize that GIA is first and foremost a nonprofit educational institution. Our mandate is to conduct research, educate, and share gem-related information of value to the trade and the public. Russ Shor’s column does just that, and we appreciate the value that his expertise and experience have brought to the GIA team – and the gemological community as a whole.

This economic and business analysis also fits perfectly into our planning for new business courses being launched by our Education division in 2002. Our goal is to enhance the training and professionalism of our student body so they can better serve the public trust. We hope you agree that by broadening the educational experience, as we are now broadening the information we share with our Insider readers, we better fulfill our mission of service to all.

The Federal Reserve reported that economic activity is slowing; the Conference Board said that consumer confidence has slipped, and the National Bureau of Economic Research maintained that the U.S. has been in recession since April. Nevertheless, “Black Friday” (the day after the U.S. Thanksgiving holiday, which signals the start of the year’s strongest retail season) was not a bleak Friday for some retail jewelers.

RETAIL: Many retail jewelers with established local markets seem to have fared well on “Black Friday” and the post-Thanksgiving weekend.  An informal survey of 14 such retailers in various parts of the country, representing all segments of the market, found that every one equaled or surpassed last year’s numbers. Here’s a sample of their comments:

Dale Perelman, President of King’s Jewelers, a chain of 47 stores based in New Castle, Pennsylvania, reported the “strongest Black Friday we’ve ever experienced.”

Basics such as three-stone rings, diamond stud earrings, and gold chains were very popular.  He expects to surpass last year’s sales this season because Thanksgiving came early this month (Nov. 22), which adds nearly an extra week before Christmas. However, he cautioned against favorably comparing numbers against last year: “Last season wasn’t good, and this year there’s no ‘funny money’ [as was the case with 1999’s rapidly rising stock market] around. Everyone’s playing with their own money now.”

Gary Gordon, CEO of Samuel Gordon Jewelers, an upscale regional independent based in Oklahoma City, commented, “We’re beating last November, though the really large-ticket items ($10,000-plus) have not been selling. Strongest sellers have been princess cut and round diamonds one carat to a carat and a quarter, priced up to $6,000. While the average price per item has fallen, there has been no downtrading in quality. Designer pieces also sold well.”

Some New York-area operations found business still struggling. 47th Street retailers reported a dramatic drop-off in traffic and sales.

Data from TeleCheck Services Inc. offers some cause for optimism: American consumers helped buoy same-store retail sales 2.3% over the same three days last year, according to that large check acceptance company. Although retail sales tapered off slightly later in the weekend from the robust start on Friday, the positive showing is consistent with TeleCheck's forecast of a 2% same-store sales gain for the entire 32-day shopping season. The TeleCheck Retail Index is based on a year-over-year, same-store comparison of the dollar volume of checks written by consumers at more than 27,000 of TeleCheck's 272,000 subscribing locations.

QVC, which helped launch the current boom in tanzanite, is discontinuing sales of the gemstone on its popular TV presentations, on its E-commerce site, and in all of its retail outlets, in response to a Wall Street Journal report about possible links between tanzanite smuggling and al Qaeda.

The Wall Street Journal quoted Marlene Daggett, QVC’s executive vice president of Merchandising: "Based on the article, we thought it would be appropriate to suspend sales of tanzanite and we are working with government agencies to obtain more definitive information." The company also canceled all of its outstanding orders.

TRADE: De Beers is reviving its branded diamond initiative in two key Asian markets beginning next year.

Tasaki Shinju of Japan and Chow Tai Fook of Hong Kong will participate in a six-month pilot study, during which they will market diamonds branded with the Diamond Trading Company’s “Forever Mark” using the same technology as the limited-edition Millennium Series DTC sponsored two years ago. The minute logo will be applied to the diamond table by focused ion beam technology. Like the Millennium series, a special device is needed to see it.

Tasaki Shinju and Chow Tai Fook are both DTC sightholders who also have extensive retail operations.  The two companies will run the pilot-branding program in six stores each.

SIGHTS: December’s allocations are always quite small, and this year will be no exception. The DTC stresses that it does not want to sell goods that won’t earn profits for clients or that clients cannot sell readily.

CONFLICT DIAMONDS: The House of Representatives passed the Clean Diamonds Act Wednesday morning 408 to 6. Compromises in the House version included giving authority to the President to impose sanctions against a country that does not have a system of controls on rough diamonds if he deems it a matter of national security, instead of the originally proposed blanket ban on any such country. The new bill also gives the President the authority to block shipments of jewelry and polished gems if there is evidence that they involve conflict diamonds.

Recognizing the importance of relaying critical information to the industry as soon it is available, GIA Gem Trade Laboratory research gemologists Shane McClure, Tom Moses, and John Koivula prepared this short supplement to the recent (November 27) special GIA Insider on the effects of irradiation used by the U.S. Postal Service on gem materials:

GIA now has absorption spectra on the three near-colorless diamonds that were irradiated by Titan Scan Technologies using the same process currently being used by the USPS to “sanitize” mail. All three diamonds (which were sawn half octahedrons) are type Ia; two were assessed as “J” color and the third, “I”. Using a Spectronic Unicam model UV-540, UV-VIS spectrophotometer, we ran ultraviolet-visible spectra at cryogenic temperatures on these samples both before and after they went through the sanitization process.  This was done to document any potential change in the 200-850 nm spectral range, the region where radiation-related absorption features occur in diamond. The spectra showed that all three were typical Cape series diamonds with relatively weak N3 centers (415 nm) and no other relevant features.

As we expected, given our knowledge of the typical effect on diamonds at the radiation dosage used, there were no detectable changes in the spectra. In particular, no radiation-related spectral features had been added. Also, as indicated in the earlier entry, there was no perceptible change in color (as determined by experienced graders) either.

Other colors and types of diamonds will be included in GIA’s ongoing research into the potential impact of postal irradiation procedures on gem materials.

Since the publication of “The Anahí ametrine mine, Bolivia” by P. M. Vasconcelos et al. (Spring 1994 G&G, pp. 4-23), there have been some significant changes in the processing and marketing of gem material from this mine. The following update was provided by Ramiro Rivero, owner of Minerales y Metales del Oriente S.R.L. (Santa Cruz, Bolivia), which has mined the deposit since 1990.

The company currently employs a full-time team of three mining engineers and geologists, as well as more than 120 miners. They are now exploiting seven areas within the Anahí mining concession, in search of cavities that are lined with the amethyst-citrine crystals (see figure). The miners extract about 30-40 tonnes of amethyst, citrine, and ametrine (bi-colored amethyst-citrine) rough monthly. The material is processed at the company’s facility in the city of Santa Cruz, which employs approximately 60 workers. Calibrated pre-forms are sent to Hong Kong for faceting, and the polished gems are then returned to Santa Cruz for sorting and quality control before distribution to the international market.

To avoid problems created by the widespread practice of mixing synthetic quartz into parcels of amethyst, citrine, and ametrine, the company sells about 80% of their gemstones directly to overseas jewelry manufacturers. Sales of rough material to selected high-end designers and cutters will continue at the February Tucson gem show. The company aims to maintain the combined production of faceted material (sold directly and cut from rough) at three million carats per year, as they have since 1998. Every year, about 100 tonnes of non-facetable material is sold to manufacturers of spheres, cabochons, and beads in Brazil and Hong Kong. The company also sells about 10 tonnes of mineral specimens annually.

For more on the Anahí ametrine mine, see the Gem News International section of the upcoming Winter 2001 issue of Gems & Gemology. To order a copy or subscribe, e-mail dortiz@gia.edu, or call toll-free 800-421-7250 ext. 7142. Outside the U.S. and Canada, call 760-603-4000, ext. 7142. Or, visit the G&G Web site, where new subscribers can now take advantage of a special limited time promotion.

Figure Caption: At the Anahí mine in Bolivia, a miner enters a large cavity lined with amethyst-citrine crystals. Photo courtesy of Ramiro Rivero. The inset shows a 30.30 ct ametrine carved by Michael M. Dyber, Gem Designer; photo by Sena Dyber.

There has been a tremendous increase in the application of computer modeling to complicated, real-world problems in the last few decades.  As the processing power of computers has grown, so has our ability to mimic, and experiment with, a wide variety of real-life situations.  These include weather patterns, financial markets, and biological processes such as cell growth or the spread of viruses in populations.  Computer modeling allows researchers to experiment in areas, and with materials, that normally would be impossible to explore.  This has been especially true in our research on diamond cut.  Gem-quality diamonds are, by their nature, rare and costly.  It would be prohibitively expensive – not to mention extremely difficult – to acquire or manufacture the hundreds of thousands of diamonds with specific proportion sets that we have examined in our desire to fully understand the effects that a diamond’s cut has on its appearance.  In this article, we will explore the components that are essential when using computer modeling, and more specifically computer ray tracing, for the scientific examination of diamond appearance.

Executive Summary:

• Computer modeling mimics the properties and behaviors of objects and their interactions with the environment.
• Diamond ray tracing has a long history, and has become more powerful with the use of computers to understand the interaction of light with a polished diamond.
• To understand how a diamond’s proportions affect its appearance, we need to model the diamond, the environment (including lighting), and the observer.
• Metrics can be employed both to define the properties of the various components in the model (such as whether the observer views the diamond from a single location or many locations), and to provide a quantifiable (often numerical) result that can be used for comparison and analysis.
• Computer modeling must always be checked by real-world verification; this includes the precision of the model, the accuracy of the match between the model and the situation that is being examined, and the level at which fine points of distinction in the model are perceptible or meaningful in the real world. 
  

To view this article in its entiretly, please click here.

If you know someone who wants to stay up-to-date on the latest technical information about diamonds and colored stones, a subscription to GIA’s award-winning quarterly Gems & Gemology may be just right. Order a new gift subscription and get FREE the definitive guide to the major gem-producing regions of the world. Please enter promotion code P01WG2 next to your name.

To order, click here.

Donations of gemological equipment and specialty books from GIA were sold in an online auction conducted by eBay to help raise funds to benefit victims of the Sept. 11 terrorist attacks. The famed GemoLite Microscope and Light Source from GIA GEM Instruments was one of the premier products donated by GIA that was sold through eBay’s Auction for America. The Institute also donated 14 books, including the widely admired, “The Micro World of Diamonds,” by John Koivula, Chief Research Gemologist for GIA. Personally autographed by Koivula, it was one of 11 books sold through the auction.

Coincidentally, the same person won both the GemoLite Microscope and Koivula book. Susan Burke, a GIA student, was the happy winner. Burke said, "I'm sure I share the thoughts of all Americans in wanting to help the victims of the September 11 attacks. Being a GIA student, I thought participating in eBay’s Auction for America was an excellent way to obtain these great GIA products and help with the victims relief efforts at the same time.”

On Sept. 21 GIA President Willliam E. Boyajian said the Institute would turn its attention to the relief efforts under way to assist victims and their families. “We believe that GIA should help this noble cause in a demonstrable way,” said Boyajian. He announced GIA would support the relief efforts by establishing a GIA Diamond Program Scholarship in the name and memory of Bob Speisman (the Lazare Kaplan executive vice president, who lost his life in the Pentagon plane crash Sept. 11), participate in “Auction for America,” and pledge the net proceeds from GIA’s annual League of Honor Founders dinner in New York (normally designated for GIA’s education and research mission) to the relief efforts for victims and their families. With the conclusion of GIA’s part in Auction for America, each of these actions has been completed.

The holiday season is once again upon us, and jewelers are planning for the sales rush with GIA’s renowned Extension classes. There are a few seats left for the Colored Stone Grading Extension class being held in New York starting Dec. 3 and running through Dec. 5.

To enroll, or for more information about these or GIA Extension classes in other U.S. cities, call 800-421-7250, ext. 4001, e-mail eduinfo@gia.edu or visit GIA’s Web site,  www.gia.edu, and click on Education.