• Industry Analysis: Inflation Rises, Confidence Ebbs
• From Gems & Gemology: First CVD Synthetic Diamond Submitted for Dossier
  Grading to GIA Lab
• GIA Thailand Adds GIA Diamond Dossier^® Grading Services
• Spanish 4Cs Brochure Available
• Student Loans Items for Native American Jewelry Display
• GIA Signage Available for Jewelry Retailers
• From GIA Education: How to Use Colored Stone Grading to Buy Gemstones
• Reserve Your Seat in One of GIA's Lab Classes
  

Industry Analysis: Inflation Rises, Confidence Ebbs

Consumer confidence continues to decline while inflation continues its march upward, according to two reports released this week that paint a gloomy picture of the U.S. economy.

The Conference Board's Consumer Confidence Index fell 12 points in January -- from 87 to 75 -- dropping to its lowest level since the week the Iraq war began five years ago.

Meanwhile, the expectations index -- the measure of how consumers view future business conditions -- fell to a 17-year low.

"With so few consumers expecting conditions to turn around in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase," said Lynn Franco, director of The Conference Board Consumer Research Center. "The Consumer Confidence Index continues losing ground and, with the exception of the Iraqi War in 2003, is now at its lowest level in nearly 15 years (Nov. 1993, 71.9)."

Inflation has begun to spread throughout the economy, according to a U.S. Labor Department report, which noted that wholesale prices jumped a full percentage point in January. Price increases were no longer concentrated in energy -- food and medicine also showed sharp rises.

The Producer Price Index, a measure of wholesale inflation, rose 7.4% for 2007, the largest increase since 1981.

DIAMONDS: Talk of impending shortages of rough diamonds has been going around the diamond industry in recent weeks: Allegedly, the large mines are in decline while demand from India and China is rising sharply.

On the strength of such reported shortages, the De Beers Diamond Trading Company (DTC) raised prices officially in January and unofficially again at the Feb. 18-22 sight, while attendees at the Israel Rough Diamond Conference complained that speculators were buying larger diamonds (5-plus carats) in hopes that prices would continue to increase.

Running contrary to such talk, however, were a number of mining companies at the conference that claimed to be exploring potentially large or medium-size deposits, suggesting that any perceived shortages may be short-lived.

Two major projects in development in Saskatchewan, Canada -- potentially yielding several million carats yearly -- are operated by Shore Gold. The Star project is a cluster of kimberlites that have so far yielded an average value of $170 per carat and include large stones. The Orion project at Fort à la Corne is similar in quality and potential yield, said George Read, senior vice president of Shore Gold, Toronto.

Several other executives reported on smaller Canadian projects, while consultant Martin Irving noted that the total diamond production from Canada should nearly double to US$3.5 billion by 2015.

In addition, conference attendees heard from smaller mining companies who are pushing a revolution in diamond mining by exploiting small, high-value deposits that De Beers and Rio Tinto could not economically work.

Clifford Elphick of Gem Diamonds reviewed the operations at Letseng, a mine that, during the past two years, has yielded a number of diamonds at 100-plus carats, including the 603-ct. Lesotho Promise and the 493-ct. Letseng Legacy.

De Beers operated the mine during the early 1980s, then closed it over a tax dispute with the Lesotho government. It remained inactive until four years ago.

Representatives of African producers expressed the need to balance the benefits diamond mining brings their people with the interests of international diamond mining and manufacturing companies. Some producers, such as Namibia, admitted they are still unsure where the line can be drawn, so they continue to work with a handful of successful operators instead of throwing the industry open to any firm.

The Vice President of Sierra Leone, Samuel Sam-Sumana, said that his country produced $140 million worth of diamonds last year and is looking to establish a transparent, open mining policy for international companies. Eugene Sherman, Liberia's minister of lands, minerals and energy, announced that his country would establish tighter controls over alluvial mining to ensure Kimberley Process compliance.

DTC Managing Director Gareth Penny said the industry was still falling short on branding efforts, with many retailers engaged in relentless discounting and putting little imagination into selling diamond jewelry.

Penny and leading bankers agreed that the industry needs to develop additional financing methods and suggested that the continuing slide of the U.S. dollar might eventually force the industry to trade diamonds in other currencies as well.

Russell Shor
Senior Industry Analyst

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DiamondView imaging of this round brilliant showed an overall orangy-pink to pinkish-orange fluorescence with irregular blue zones, similar to the pattern reported previously for CVD synthetic diamonds. Photo by K. M. Chadwick.

From Gems & Gemology: First CVD Synthetic Diamond Submitted for Dossier Grading to GIA Lab

Karen M. Chadwick and Christopher M. (Mike) Breeding of the GIA Laboratory in Carlsbad submitted the following report:

Synthetic diamonds grown by the chemical vapor deposition (CVD) technique have been discussed in several Gems & Gemology (G&G) articles, most recently the update on Apollo CVD synthetic diamonds by W. Wang and coauthors that was published in the Winter 2007 issue. They have rarely, however, been encountered in the day-to-day grading operations of the Laboratory.

Recently, the Carlsbad Lab identified a near-colorless CVD synthetic diamond weighing approximately one-third of a carat that had been submitted for a standard GIA Diamond Dossier^® grading report. This round brilliant is the first CVD product submitted to the Carlsbad Lab for a grading service. Previously, all of the CVD samples examined in Carlsbad were received directly from the manufacturer for research purposes.

Growth of synthetic diamonds via the CVD method can be accomplished at relatively low pressures, in contrast to the more extreme requirements for growth of high pressure/high temperature (HPHT) synthetics. During CVD growth, gaseous interactions result in deposition of synthetic diamond onto a suitable substrate; single-crystal synthetic diamond is the substrate typically used for production of gem-quality material. Element Six of the United Kingdom and Apollo Diamond Inc. of Boston are two well-known producers of gem-quality CVD materials.

Microscopic examination of the sample submitted for grading revealed numerous feathers and related cavities on the pavilion, which resulted in a clarity grade that fell into the Slightly Included (SI) range. Pinpoints were also observed. Under cross-polarized light, the synthetic diamond showed unevenly distributed, high-order strain colors -- the first of many similarities we encountered between this sample and those discussed in the 2007 Wang et al. article.

It exhibited no visible fluorescence to either long- or short-wave UV radiation emitted by a desk-model UV lamp; however, when subjected to the stronger ultra short-wave UV emissions of the Diamond Trading Company DiamondView, it showed an overall strong orangy-pink to pinkish-orange fluorescence (typical of CVD synthetic diamonds), interspersed with patches of blue (see figure). When viewed through the pavilion, the fluorescence details became significantly clearer -- including red striations that were most prominent in the pink/orange region and concentration of the irregular blue patches toward the culet -- features that were both described by Wang et al.

Fourier-transform infrared spectroscopy indicated that the synthetic diamond was type IIa, and low-temperature photoluminescence spectroscopy using four different laser excitations revealed a classic CVD signature consisting of peak doublets at 736.6/736.9 nm (due to the silicon-vacancy [Si-V] defect) and at 596/597 nm. While the 596/597 nm doublet is still considered unique to CVD synthetic diamonds, the Si-V doublet has been reported in some rare colorless and near-colorless natural diamonds. Most of the other peaks reported by Wang et al., including the 3H (503.5 nm), were also observed.

Given the many similarities between this synthetic diamond and the Apollo CVD material produced during 2006 and 2007 that Wang et al. studied, it is likely that this sample is from a similar generation. Its submission to the Lab for Diamond Dossier grading confirms that at least some CVD-grown synthetic diamonds are present in the marketplace. Examination by a gemological laboratory remains the most effective way to confidently identify synthetic diamonds.

The sample was returned to the client with a Synthetic Diamond Grading Report and the words "LABORATORY GROWN" laser inscribed on the girdle, as is GIA's standard practice.

For more on the latest developments at the GIA Laboratory, read the Lab Notes section in each issue of G&G. To subscribe, click here or contact Circulation Coordinator Debbie Ortiz toll-free at (800) 421-7250, ext. 7142. Outside the U.S. and Canada, call (760) 603-4000, ext. 7142.

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Ken Scarratt, managing director for South East Asia and director of the GIA Thailand Laboratory. GIA file photo.

GIA Thailand Adds GIA Diamond Dossier^® Grading Services

GIA's Laboratory in Bangkok, Thailand, is offering the Institute's Diamond Dossier grading services to clients in the region, effective immediately.

"We now have a fully trained laboratory staff on-site in Bangkok," said Tom Moses, senior vice president, GIA Laboratory and Research. "With these highly skilled people, GIA Thailand today performs complete colored stone and pearl services, and has expanded those offerings to include diamond grading. We aim to provide Thailand and the region with the full range of GIA client services while at the same time ensuring reasonable turnaround times."

The Thailand Lab will initially provide Diamond Dossier services that cover diamonds ranging from 0.15 carats up to 1.99 carats, Moses said. "In addition, the GIA Laboratory in Bangkok is accepting diamonds for all other services and will deal with them on an expedited basis at one of the U.S. offices."

Clients can send goods for identification and grading using Brinks Bonded Facility in Thailand, said Ken Scarratt, managing director for South East Asia and director of the GIA Thailand Lab. "All clients have to do is submit their stones to Brinks in their home country and Brinks Thailand will handle importation into Bond. This makes it possible for GIA to service every country in the region."

The GIA Thailand Lab has also teamed up with GIA Thailand Education to share a booth at the 41st Bangkok Gems and Jewelry Fair, which runs through March 2, according to Scarratt. The booth's focus will be on diamonds, though all other services will also be covered.

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Spanish 4Cs Brochure Available

GIA's first-ever Spanish version of the Institute's 4Cs brochure is now available. It is the latest version of GIA's international 4Cs brochures.

The brochure, designed to educate people about the main elements of diamond quality -- color, cut, clarity and carat weight -- underscores the beauty and rarity of diamonds. Full-color photographs and illustrations are used to explain the GIA color and clarity scales and the GIA cut scale for round brilliant diamonds.

"As an Institute whose mission is to educate the public, we recognize the importance of communicating through various languages," said Donna Baker, president of GIA. "As our organization continues to show strong international progression, we will continue to produce the 4Cs brochure in different languages."

Click here to see samples, download PDFs or order copies of both the English and Spanish brochures.

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From left: Zuni knife-wing figure inlay bracelet, owl inlay ring and thunderbird inlay ring. Photo by Kevin Schumacher.

Two Navajo turquoise slab bracelets by Jerry and Joann Johnson. Photo by Kevin Schumacher.

Student Loans Items for Native American Jewelry Display

Jamie Steelman, an On Campus student in GIA's Graduate Gemologist (G.G.) program, was 15 when he moved with his family to Albuquerque, New Mexico. He soon fell in love with the Native American culture and its jewelry, which "reflects the colors of the desert." He has been collecting and studying it ever since.

"Traditional Native American jewelry is a truly American art form," Steelman said. "Its beauty lies in its rusticity."

A selection of his pieces that reflect these qualities, including a Navajo squash blossom necklace made of large chunks of Lone Mountain turquoise, a Zuni thunderbird inlaid ring and other items from the Navajo and Zuni tribes, is on display in GIA's atrium in Carlsbad, California.

"We really appreciate that one of our students wanted to share his love for this jewelry with the GIA community," said Kim Vagner, project manager of In-Kind Gifts.

Tribes used bone, wood, shell and other natural resources to make jewelry in ancient times. Europeans brought silver when they arrived in the New World, and these and other metals were incorporated into their designs. As a result of this blending of cultures and materials, Steelman said, "You can see how jewelry evolved in this country."

Jewelry was an important element in Native American religious rituals and many of the pieces reflect their spiritual beliefs, according to Steelman. Animal spirit guides may be indicated in the carved animals of the Navajo fetish bib necklace, and turquoise symbolizes a metaphysical connection to the sky and water. All of the jewelry is representative of the unique indigenous American culture.

A bibliography compiled by the Richard T. Liddicoat Gemological Library and Information Center staff accompanies every GIA exhibit. These bibliographies are "the perfect complement to each theme," said Dona Dirlam, the Library's director. "They provide an added dimension to the Museum displays."

Among the suggested books for the Native American display are texts on beadmaking, fetish carving and silversmithing.

The Native American display can be viewed at GIA's headquarters in Carlsbad, California. Museum exhibit viewings are free and available to the public through scheduled tours. To sign up for a tour, contact guestservicesmailbox@gia.edu or call (800) 421-7250, ext. 4116. Outside of the U.S. call (760) 603-4116.

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GIA Signage Available for Jewelry Retailers

GIA has posters and duratrans (back-lit posters) available for in-store display designed to let your customers know you carry diamonds graded by GIA. Available in several sizes and finishes, these items can be ordered directly online for a nominal fee, or you can download the graphic files at no charge to produce yourself. Posters are available mounted and unmounted; duratrans are designed to fit a variety of light box sizes.

To check out these new items and to place an order, go to the retailer support section of our Web site. You'll also find information about our free Retailer Support Kit, which includes tools you and your sales associates can use to help you explain essential diamond information to your customers.

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Retailers commonly use grading methodology to assess the quality of colored stones they are considering purchasing from wholesalers. Photo by Eric Welch, courtesy Stone World.

Trade shows, like the ones in Tucson, Arizona, provide a wide selection of colored stones for wholesalers and retailers to consider purchasing. Lighting and other environmental factors to determine the stone's quality may be challenging in these circumstances, however, so some dealers bring daylight equivalent lamps to help them make their assessment. Photo by Valerie Power.

From GIA Education: How to Use Colored Stone Grading to Buy Gemstones

The mindset of a buyer or sorter evaluating the quality of a colored stone is entirely different from that of a professional selling it, although the same person may end up doing both.

The sales professional builds passion and romances the stone to his customer when trying to sell it. They give an accurate description of a gem's quality and build the "got to have it" desire in their customer.

When acting as gemstone buyer, however, they must limit that passion and desire. They need to make an objective assessment of the colored stone they may purchase based on how they grade the stone and the economic reality of their market.

Many professionals do both selling and buying by simply changing their mindset according to the task at hand.

Regardless of your role, however, specific procedures are very important to use when you evaluate colored stones. One of the most important aspects to consider is lighting. For consistency, you should try to view colored stones under daylight-equivalent fluorescent lighting whenever possible. Make sure you use a neutral background and examine all the gems at the same distance from the daylight-equivalent light source. If you use natural light, try to grade gems around the same time every day.

Purchasing gems in the same place and at the same time of day is one of the best ways to have consistent results. The reality is, however, that some colored stone buyers will make purchases all over the world under various conditions. Adaptability is a key aspect of the job. When you can't control the lighting conditions in a buying situation, use your own comparison stones or color samples. Color-comparison samples are essential for gems like aquamarine, where prices rise with subtle increases in saturation.

You should ask these questions when you assess the color of a gemstone you are thinking of buying:

• What is the gem's bodycolor?
• Is the stone light, medium or dark in tone?
• Is the saturation weak, moderate, strong or vivid?
• Is the stone's color exceptional or poor for that gem species?

Slight variations in hue, tone and saturation can make a tremendous difference in price in some gem varieties. In general, the stronger a color's saturation, the more desirable that color is. Some hues are preferred for certain gemstones like pure red or slightly purplish red over orangy red for ruby. Tones that are too dark or light will not have the saturation needed to be an exceptional color. Precise grading and knowing the market are the keys to maintaining a margin in this competitive market.

Take advantage of colored stone grading systems to give you a way to classify the color grades of gemstones and account for the value differences between them. You should always assess a gemstone's beauty and value by comparing it with others of its own species or variety. Although garnet, ruby, red beryl and spinel can all look similar, for example, each gem has its own unique beauty and value factors.

For more information on colored stones, refer to the GIA Colored Stone Essentials, Colored Stones, and Gem Identification courses, as well as the Colored Stone Grading and Gem Identification Lab classes.

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Students gain the practical experience needed to succeed in the jewelry industry in GIA's Lab classes. Please note: A Gem Identification Lab class has been added to our Harrisburg, Pennsylvannia schedule. GIA Lab classes starting in March 2008 are as follows:

For more information, see Gemology and Jewelry Manufacturing Arts Lab class descriptions. You can also e-mail GIA Education, apply online, or call (800) 421-7250, ext. 4001, for more information. Outside the U.S., call (760) 603-4001.

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