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2014/11/21

In an article titled: “Honest Grading The truth, the whole truth and nothing but the truth,” Martin Rappaport once again lashes out at EGL International and the problem of overstated diamond grading reports. He brings up valid points on the effect to our industry of applying common terminology with varying standards. I share his dream of cleaning up the fetid mess we see in the market. But is it possible?

 

GIA created the terminology for communicating diamond qualities using D-Z for colour and FL-I3 for clarity. They apply their own standards to the use of the system and produce diamond grading reports. GIA never patented, trademarked, copyrighted, or set into place any formal protection to the terminology leaving it open to interpretation. EGLI is correct, there is no international standard. The market may have determined that GIA reports bring a higher price and therefore may be considered as a standard but that is just common usage and has little legal weight.

 

We could even call into question the use of GIA as an industry standard. A standard should be consistent at all levels. GIA labs are usually consistent but most people in the diamond business have at some point resubmitted stones to different GIA labs hoping for and getting a better grade.

 

GIA is also the most recognized name for gemmological education. They teach the GIA nomenclature and standards. Unfortunately the standards they teach are not the same standards used by their lab. They teach an eye-visible inclusion should be an I1 but might reach as high as SI1. Yet there are plenty of examples of GIA reports with eye-visible inclusions up to VS1, mostly on larger stones. That can be an expensive inconsistency for someone relying on their GIA training to grade a stone for sale.

 

Even if GIA was perfect and consistent, getting everyone to adhere to GIA standards would be nice...but impossible. That genie will never go back in the bottle. It’s too late. There is too much junk paper already on the streets using GIA terminology. We can’t wave a wand and make it go away.

 

We need to start over with three basic requirements:
Consistency, Precision, and Accountability.

 

Consistency and Precision can both be handled through technology. We need properly calibrated grading devices that are able to deliver precise numerical results. These should be the same every time on any unit. Numerical grading will eliminate the problem of grading ranges; getting rid of one of the hidden fudge factors found even in the most honest grading where a “High G” will sell for a bit more than a “Low G.”

 

Precise, repeatable grading leads to precise and consistent pricing. Without that precision we can forget about a diamond ever being a commodity.

 

But none of this will work without the one thing that is sorely lacking in the diamond grading industry: Accountability. We simply don’t have it. Every level of the industry relies on lab reports to make important financial decisions. Though the reputation of a jeweller or diamantaire may ride on these reports, not one single lab will stand behind their grades. Every lab, including GIA, has a disclosure paragraph stating that this is only an opinion and the lab holds no responsibility for anything...even errors. They hold their own customers responsible for the lab’s mistakes. The lab screws up, the diamond seller gets sued.

 

Don’t blame one lab for misuse. Blame all of the labs for cowardly hiding behind fine print and not having the courage to stand behind their grades. Until a lab comes forward that can eliminate subjectivity, produce precise repeatable results backed by the willingness to guarantee their reports ...we will never end the problem of misuse of grading.

 

Without accountability, Mr. Rappaport’s dream is sadly impossible.

 

 


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2014/11/21

David Weinberg

Director, Partner at Multicolour Gems Ltd (www.multicolour.com)

 


The cut is what gives a gemstone  its beauty and brilliance. An ideal cut which reflects all the light in an even pattern without any darkness or windowing is always preferable when rough of a suitable shape and clarity is available. In faceted stones, specific indices and critical angles are what produce the maximum brilliance.

 

The proportions and angulations for diamonds are well known and an ideally proportioned diamond is always desirable. Diamonds are relatively clean and their natural habit is generally ideal for cutting round brilliants to ideal proportions.

 

Colored stones are a different story. They are normally not clean and their shapes can be blocky, rounded, angular, tabular, elongated or flat. And, because color is the most important factor affecting their valuation, the color needs to be carefully considered in any kind of decisions concerning the cut.

 

(Aquamarine weighing 1.40 cts and Spinel weighing 1.46 cts from Tunduru,
Tanzania cut into a fancy lip shape from Multicolour.com)

 

Modern faceting equipment makes it relatively easy to cut a colored stone to ideal proportions with the correct critical angles. Faceting diagrams with the angles and indices are readily available and any dedicated hobbyist will be able to cut perfectly proportioned stones in a short time if they are working with inexpensive materials and are not concerned about yield.

 

However, since color, clarity, and carat weight are at least as important as cut, every colored stone cannot be cut to ideal proportions. Some rough is very flat, some is heavily included, some is dark, and some is light. Dark stones cut to perfect proportions may increase in value because stones always become lighter as their size is reduced. Conversely, light stones can easily lose value when they are cut down because their color will become lighter. Flat stones cut to perfect proportions will yield tiny stones that will be worth less than if they remained flat and windowed. Heavily included stones should be cut en cabochon, and over dark stones may look even better with a window to lighten their body color.

 

Inexpensive stones can always be ideally cut and the quality of the cut will add value to the stone. With a low value and plenty of availability on the supply side, the final weights and sizes of the less expensive gemstones are not critical.

(Pair of Tanzanian emeralds weighing 3.75 cts cut into a drop shape from Multicolour.com)

 

For the rare and expensive gem materials the situation is completely different and the final weights and sizes of the stones are a critical part of their valuation. Valuable gemstones cannot simply be ground to perfect angulations with out the considerations of color, size, weight, and the locations of the inclusions. In many cases the less than ideal cut will be worth more than the same stone cut perfectly because of its larger size.

 

Native cuts


Native cut is normally a condescending term used to describe poorly proportioned gemstones. The implication is that natives living in the jungle or near the source are unable to cut stones properly. This may or may not be the case but some of these cutters may have a lifetime of expertise and they are well aware of what they are doing. The truth of the matter is, wholesale gemstones prices are based on their price per carat. These cutters sell wholesale to dealers and they want to maximize the weights for their market. They have no market for end users and it would useless for them to cut to ideal proportions and angles because their customers would not pay for the associated increase in price and they would be losing money.

 

Perhaps a better description would be the “first cut”. The first cut is like a rough draft. And in the case of more expensive materials, they should be cut roughly the first time to get a better idea of their color and the clarity. In fact some of the very people that complain about native cuts are hobbyist cutters/resellers who love to buy them because they can easily foresee what they can achieve by re cutting them. Good cutting is the process of cutting a stone from the rough to the end product and there can be a whole series of cuts in that process. There is absolutely no advantage to cutting a stone perfectly on the first try.

 

Companies that process quantities of valuable rough incentivize the cutters by paying them per carat. The cutters don’t really care because they are not the owners of the material. However, when they are paid for producing the largest possible stones, they will pay attention and do just that. After that, the finished stones can be re selected for better cutting or calibration or special cuts. There is no other way to control the large scale production of valuable or even relatively valuable gemstone materials. Weight doesn’t really matter for soft and abundant stones like Amethyst, Citrine, and Topaz, but yield is critical for valuable stones like Rubies, Sapphires, Alexandrites, Tsavorites, and Emeralds.



For wholesalers and gemstone manufacturers, a compromise between weight and ideal proportions is the best solution. Some people want a large flat stone that will look big in the ring but cost less while other customers would prefer a small stone for the same price with perfect proportions and angles. And, as most gemstones are included to some degree there is no simple easy rule for every stone. Many successful wholesalers prefer to offer stones in a nearly finished stage so they still have an option to recut, repolish, reshape, calibrate or to cut perfectly for their intended market. Once the stone is cut and reduced in size, it can never be sized up again. There is no undo button!

 

As a first step, large and valuable stones like sapphires, rubies, and emeralds are always cut for weight. In small melee sizes, these stones can be precision cut because the rough is less valuable. However, as the sizes and weights of the stones increase, the valuations of the stones become primarily linked to their weight, color, and clarity.

 

Fancy and precision cuts


These kinds of cuts can look great and may maximize the brilliance. Some of the styles are creative but most are just variations of established cutting patterns. Although, there are some exceptions, the cuts are primarily used for less expensive gemstone materials to add value. When sellers mention “designer cut” or “precision cut” to the description of their product, it adds a great deal of interest but these cuts are rarely applied to valuable materials because conventional cuts are more accepted. Designer cuts of soft stones like Amethyst, Citrine, or crystal Quartz or common stones like Topaz do not add any resale value to them. These gemstones may look great but with a lower hardness or no foreseeable rarity, they will never have any resale value.

 

Nowadays, customers can choose between perfectly cut smaller stones or larger or even much larger stones for the same price. When asked, many customers will prefer the perfectly cut smaller stones but when its time to actually buy, more will go for the larger stones at the same price. Opinions and tastes will vary and the ability of the cutter is evident in the finished product but size, clarity, and color are at least as important as the cut.

 

Cutting colored stones is an art. Computer programs can analyze diamond rough and offer the best possible orientation and yield but colored stone cutting is complicated in other ways. Because of the colors, the pleochroism, and the orientation, diamonds rules will not work and perfect ideal cutting is simply uneconomical for many of the more valuable colored stones because their final size is as at least as critical as their cut. The cut is the only gemstone parameter that can be fixed so a less than perfect cut is not the end of the story and it can still be easily rectified by an experienced lapidary.

 

 


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2014/11/19

US demand for gold jewellery increased by 4 percent year-over-year to 34.4 tons, according to the World Gold Council. It was the sixth consecutive quarter of year-over-year growth.

 

The WGC, in its Gold Demand Trends report for the third quarter of 2014, said the economic recovery and a downward trend in the price of gold created a “revival” of gold jewellery demand in the US that had a “ripple effect” around the world.

 

“The US sucked in greater volumes of gold jewellery imports from markets as diverse as India, China, Italy, Mexico and Oman,"

According to the report released last week.

“Third quarter growth in the US market was very much an extension of the trend that has prevailed since early last year. Mounting conviction in the economic recovery has boosted sentiment and whetted consumers’ appetite for discretionary purchases. Gold jewellery has been a clear beneficiary: improving sales of higher carat and non-wedding related items helped demand to the highest Q3 total since 2009.”

 

The report added,

“Lower gold prices have aided the recovery of US demand as retailers are more easily able to meet key price points without crimping margins. Or, similarly, to increase karatage while maintaining price levels. This has enticed some mass- market retailers back into the gold jewellery sector.”

 

Gold Demand Trends Q3 2014 Infographic | Source: WGC (World Gold Council)

 

On a global basis, gold jewellery demand fell 4 percent year-over-year to 534.2 tons for the third quarter. However, the decline comes against an unusually robust third quarter of 2013, which experienced the strongest growth for jewellery demand since 2008.

 

“Longer term analysis shows a market in good health. Q3 demand was marginally stronger than the five-year quarterly average of 527.6 tons, while year-to-date volumes continue to extend the broad uptrend from the low seen in 2009,”

the WGC said in its report.

 

India had the strongest third quarter by far as it experienced a 60 percent year-over-year increase in gold jewellery demand to nearly 183 tons—the second highest third quarter on record, the WGC said.

 

“The third quarter of 2013 was decidedly weak as the introduction of complicated new measures to restrict gold imports and the subsequent sharp rise in local prices knocked demand,”

the WGC said in its report.

“But this quarter, other more positive forces were also at play.”

 

Among those forces is the confidence in the new Indian government led by Prime Minister Narendra Modi, a drop in the price of gold and robust buying during the Diwali festival season.

 

Meanwhile, China experienced a 39 percent year-over-year decline in gold jewellery demand to 147.1 tons. Hong Kong (where consumers from the mainland China account for most of the demand) fell 31 percent to 9 tons. The WGC said much of this decline is in comparison to the rapid expansion throughout 2013 and that gold jewellery sales are normalizing.

 

“18-karat (K-gold) jewellery was relatively more robust than the 24-karat (chuk kam) segment,”

the WGC said.

“The government’s anti-corruption drive may have contributed to this trend.”

 

 


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2014/11/18

India and China, the two pillars of global gold market have been engaged in fierce competition as far as consumption of the yellow metal is concerned. The ‘Numero Uno’ status enjoyed by India as the highest gold consuming country was snatched away by China in 2011. But India has regained its number one position in the third quarter of 2014 with gold jewellery demand sharply dropping in China by 39% and surging in India by 60%.

 

Mr. Alistair Hewitt, Head of Market Intelligence at the World Gold Council (WGC) says,

"Our forecast for the remaining year is the same for both India and China. We expect demand in both to come in at between 850-950 tons. Both the countries remain very positive pillars of the global gold demand."

 

Last year's number one consumer China saw a 39% drop in jewellery consumption as well as a 30% downfall in bar and coin investment. Its combined demand came down by 37%. The gold crazy country India once again re-established itself as the world's biggest gold consumer, buying 225.1 tons of gold jewellery, coins and bars during the third quarter as compared to compared to 182.7 tons in China.

 

Glitter of gold worries Government of India

 

Sounding optimistic, Mr. Somasundaram PR, head of the WGC's India Operations says,

"The demand would continue to have encouraging growth over last year as this is a good demand season and a lot of marriages are happening. Jewellery demand in India surged 60% in the Q3 but investment demand eased by 10%.”

 

“We (WGC) maintain our forecast that Indian demand would reach to 850-950 tons for the year, driven by jewellery purchases. But Investment demand is expected to fall to 25% of total demand this year from 37% the year before as a sharp price drop has upset the confidence of Indians in bullion as a store of value,” he adds.

 

The WGC’s Q3 result analysis says that the jewellery demand is also boosted by a weakening of gold prices in rupee terms and by widespread confidence in a new government, along with the onset of the encouraging festival season.

 

India’s September imports of gold surged by 450% to $3.75 billion.

“Demand for the Q4 as a whole is likely to be healthy but the September surge in imports is unlikely to be replicated," the WGC observed.

 

The figures may prove to be morale-booster for India’s jewellery industry but certainly not for the government which has been struggling with a high trade deficit. The India government raised gold import duty last year to a record 10% and made it mandatory by introducing the 80:20 Rule to export one fifth of all bullion imports.

 

As a result of the curbs on gold imports, India’s Current Account Deficit (CAD) was well under control, but alarmed with the substantial surge in imports of the yellow metal during last couple of months, the government may be compelled to introduce such measures to regain control over the heavy gold imports.

 

India’s October 2014 gold imports have jumped to 148 tons which indicate six-fold rise from less than 25 tons in the same month of 2013. Imports in the September quarter were up by 39%.

 

Top officials of India’s Finance Ministry and the Reserve Bank (RBI) had met recently to consider tightening import controls on gold. But the meeting has remained inconclusive and they have agreed to meet again in a few days to take a decision, official sources say.

 

 


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2014/11/17

There is nothing else in the world that can melt a girl’s heart like a beautiful, delicately crafted piece of jewellery. Not to mention though, that sourcing for Valentine’s Day is a perennial challenge for many jewellery buyers. 

How well do you know your lover?

Photo Source: Shutterstock

Motif that Sells

Elements such as a heart, bow-knot, cupid, and flowers can always be found in a Valentine's Day collection in eye-catching displays of jewellery stores. 

Most women have a desire for a special gift, but not necessarily something really expensive, from their beloved on that day. The number one choice of all time which never gets old is also a straightforward option: Heart-shaped jewellery. You just know what it means right away. 

Heart Pendant by Phu Nhuan Jewelry Joint-Stock Company - PNJ, Vietnam

Heart Pendant by Phu Nhuan Jewelry Joint-Stock Company - PNJ, Vietnam

White Gold Diamond Encrusted Heart Bracelet by Meira T Designs, USA

White Gold Diamond Encrusted Heart Bracelet by Meira T Designs, USA

Words of love (925 Silver Beads) by Keyline International Group Limited, Hong Kong Tender Love Earrings by Regal Jewelry Manufacture Co Ltd, Thailand

Left: Words of love (925 Silver Beads) by Keyline International Group Limited, Hong Kong;

Right: Tender Love Earrings by Regal Jewelry Manufacture Co Ltd, Thailand 

Hearts Necklace with Diamonds by Ricky Jewellery Company Limited, Hong Kong

Hearts Necklace with Diamonds by Ricky Jewellery Company Limited, Hong Kong

 

 

More Heart-Shaped Items

Left: I Love You Necklace; Right: I Love You Chained Ring. Both from Djula Jewelry, France

 

 

Lock Your Heart

A locket is a perfect, personalised gift for this very special day. I know you may start thinking about its traditional use – shrinking and fitting in your lover's picture but you can actually be more open and creative towards this multi-purpose accessory. 

Now there are various designs supporting your creativity including an interchangeable locket for setting your favourite natural gemstones or birthstones, and a locket with solid perfume which is also a big hit among working women. If you have a talent for making solid perfume, forget about the tin box and select the fashionable locket.

Hand Engraved Lockets by MPM Di Gobbato Srl, Italy

Hand Engraved Lockets by MPM Di Gobbato Srl, Italy

Lady's Locket in Stainless Steel with changeable coins, Donny J, Hong Kong Floating charms locket (25mm ) with open and close function, Donny J, Hong Kong

Left: Lady's Locket in Stainless Steel with changeable coins; Floating charms locket (25mm ) with open and close function. Both from Donny J Hong Kong Ltd, Hong Kong

Heart Secret Ring by BALEANI ALTA GIOIELLERIA, Italy

Heart Secret Ring by BALEANI ALTA GIOIELLERIA, Italy

 

Heart in Heart Details

Using heart-shape findings to highlight your designs for Valentine’s Day will add just the right touch of romance to your collection. A graceful and simple designed heart-shaped clip or chain would definitely make the whole piece stand out.

17x19.0mm Heart Disc SPAT by J. K. Findings, USAJewellery Clip by Yum Luk Kee Jewellery Ltd, Hong Kong

Left: 17x19.0mm Heart Disc SPAT by J. K. Findings, USA; 

Right: Jewellery Clip by Yum Luk Kee Jewellery Ltd, Hong Kong

Wire Heart Chain by Big Silver Manufacturing Co Ltd, Thailand

Wire Heart Chain by Big Silver Manufacturing Co Ltd, Thailand

 

Gift Box for Giving

Last but not least, don't forget the gift boxes and packaging for Valentine's Day. Appropriate packaging will create that sweet introductory moment when your beloved receives her special gift, so suitability is key to a right match. The choice is quite different from other seasons so it is important to ensure something thoughtful yet elegant. 

Odear Fashion Ltd Man Yue Hong Industrial Ltd

Left: Jewellery box with mini LCD monitor by Odear Fashion Ltd, China;

Right: Leatherette Box by Man Yue Hong Industrial Ltd- Hong Kong

Left: Paper Jewellery Box for Valentine's Day by Land Fortune Industrial Limited - Hong Kong;

Right: Gift Box and Pouch in Paper/ Aluminium by Elegante Arts Packaging Company Limited- Hong Kong

View More Display and Packaging Items 

 

Photo Source: Shutterstock


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