Special Report Predicting Higher Diamond Prices Next Diwali Mumbai Diamond Market Report What’s hot; what’s available & how much it costs December 2010 magazine India retail N e w ! D i a m o N D R e t a i l B e N c h m a R k A p r i c e l i s t t o a s s u r e y o u r c u s t o m e r s Can You Assure Your Custome r About The Diamond?
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
RaMat gan 52130, ISRaEltEl: +972-3-575-7455, FaX: +972-3-7511203
iDEX m g z e - i d re ed i d idex o e s.a.. re f d d e e e
e ed . a g e e ed. n f e e d ed, ed e e e
ed f e w e w e
e f e c g w e .
PUBlISHED BY YaROn BaRzIlaY FOR IDEX OnlInE S.a
ISSn 0334-68382003 IDEX OnlInE S.a.
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 3/22IDEX MagazInE – InDIa REtaIl | nO 01: EDItOR 3
From theEditor’s Desk
B elief in the intangible requires a lot of work. Tomaintain that belief, the believer has to know that his or her belief is shared by others and
that there is no variance in this shared belief. Withoutthis certainty, without the assured support of one’s peersin endorsing and participating in the same belief, onestands alone and in danger of ridicule. No one wantsto stand alone and no one wants to be r idiculed.
Diamonds are essentially a belief system. Their value isin the eye of the beholder and this value is maintainedbecause enough people around the world perceive that
value as something worth holding. In today’s competitive world, there are a myriad other luxury products thatall offer the consumer some intangible value -- anexperience, the approval of others, some social markthat sets them apart or even a neighbour’s envy. Al l of these products carry with them the promise that the
stated attributed, whatever it is, will be delivered withoutfail. And all of them make good on that delivery.
Apart from their symbolism in the relationship betweenmen and women, diamonds offer their owners theperception of great beauty and very importantly, theperception of great value. All of these attributes requireuniversal acceptance in order to even exist. Universalacceptance of these attributes is in turn based on
widespread and unvarying adherence to a specifiedset of rules in assessing value. Use different rules and
you destroy the attributes themselves because they nolonger have universal acceptance.
Diamonds in India are today teetering on the edge of a dangerous precipice because in different parts of the country, they are assessed and valued differently.This is causing a great deal of consumer angst andposes the poses the imminent threat of the diamond’sattributes being rejected altogether because they arenot universally accepted.
It is to the Indian jewellery retail industry’s credit that itrecognizes this danger and is will ing to take immediatecorrective action. But it is faced with a daunting task. Itneeds to quickly and collectively institute a nationwidesystem of ensuring that both the assessment and theperceived value of the diamonds it sells is based oncommon systems that will return the same resultsanywhere in the country. The grading of diamondsand the way they are priced need to be standardizedon a common platform. This is far more easily saidthan done and the pitfalls are many.
The very first is the reality that no matter how hard onetries, not everyone can be convinced to make the necessary change. Which then throws up the first hurdle. Won’t the
willing adopter of a nationwide system be at a disadvantagein his own market if his nearest rival refuses to accept thesystem and continues to his own arbitrary rules?
The answer is yes, in the short term, adopting a standardgrading and pricing system might be a disadvantage
when faced with competition that doesn’t adhere tothe same rules. But in the long term, adopting andadhering to standardization is a clear advantage. Thisis borne out by the “one gold price” policy adoptedby the vast majority of retailers under the umbrella of the All India Gems & Jewellery Trade Federation (GJF).Those who have refused to abide by the one-price normhave, after enjoying a short advantage, only succeededin shrinking their own profit margins.
So our exhortation is, go for it! Whatever the short-term problems, you’ll be a winner in the end. And if
we don’t adopt standardization as an industry, we allstand to lose a great deal more. ■
Vinod KuriyanEditor
The Vital Need To Bolster Belief
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 4/224 IDEX MagazInE – InDIa REtaIl | nO 01: MUMBaI DIaMOnD MaRKEt REPORt
MumbaiDIaMOnD MaRKEt REPORt
t he Mumbai diamond market is experiencinga slowdown just before Diwali due acombination of factors. A prime rea son is
the rupee, that has strengthened a great deal againstthe US dollar. Manufacturers who bought roughsome weeks ago, did so when it took over R s.46 tobuy a single greenback. Today, the dollar is tradingat just over Rs.44. What this means is that in dollarterms, the same goods fetch manufacturers, whohave converted rupees to dollar s to buy rough andnow want value addition that adds up to a de centmargin in r upee terms, so much less, that in somecategories, margins would be completely wipedout unless polished selling prices were pushed up.Their attempts to do so have been met with strong
resistance from both domestic and internationalbuyers, thus stalling transactions.
Additionally, the recent bank defaults by some bigplayers have resulted in raids by the tax authoritiesin the Opera House diamond district, knocking alot of momentum out of usual trading. As if this
weren’t enough, there have also been several failuresamong smaller operators and together with the raids,they have damped trading all round.
There is disappointment that the end stretch of the run-up to Diwali has ended so di sappointingly,particularly as the period from September to midOctober had been strong. ■
Strong Dollar, Financial UpheavalsDamp Trading In Mumbai
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 5/22MagazInE – InDIa REtaIl | nO 01: MUMBaI DIaMOnD MaRKEt REPORt
Size in Ct. (Sieve) Comments Forward Call
▲ -0.01 (-2 ) Very ood dem d for SI+ oods.good dem d for ower piqué oods.Very hoc e ory over .
Shor es & prices re ike y o i cre se. Pricesm y o up by 2%-3%.
▲ -0.02 (+2-6.5) Very ood dem d for SI+ oods.good dem d for ower piqué oods. Dem dfor +4 sieve is improvi .
Shor es & prices re o he rise.Prices m yo up by 2%-3%..
▲ 0.03-0.07
(+6.5-11)
good dem d for ower piqué & SI+ oods.+8sieve is he mos w ed sieve, hou h he
focus is ow shif i o -8 sieve..
H s bee he ho es c e ory i he recep s . Some si s of prices sof e i i he e r
fu ure.
▲ 0.08-0.14 (+11-14) good dem d for piqué & SI1+ oods. ac ivi y wi rem i s b e.
▲ 0 .15-0.17
(+14-15.5)
good dem d for piqué & SI1+ oods. ac ivi y wi rem i s b e, wi h shor es of oods.
▲ 0.18-0.22 (1/5) F ir dem d for SI1+ oods. Over , ow c ivi y wi be see i hisc e ory.
▲ 0.23-0.29 (1/4) good dem d for VS+ & piqué oods.Dem d for VS+ oods m i y for domes icm rke .
Due o shor es, price for VS+ oods m y oup by 1%-2%.
▲ 0.30 (1/3) good dem d for VS+ & piqué oods.Dem d for VS+ oods m i y for domes icm rke . g-J co ours i re er dem d.
Dem d & prices wi rem i s b e.
▲ 0.40 (3/8) good dem d for VS+/g-J co .Dem d for his c e ory is m i y for hedomes ic m rke .
Dem d & prices wi rem i s b e.+0.45 c .will be dif cult to nd.
▲ 0.50 (1/2) good dem d for I2+/g-J co . Over , everyc ri y i ood dem d.
Dem d & prices wi rem i s b e. Be erdem d see for D&F co ours.
▲ 0.75 (3/4) good dem d for I1/I2 & VVV/VS c ri y.+0.80c . I re er dem d.
Dem d for +0.90 c . expec ed o i cre se s er ive o 1 c r .
▲ 1.00 (4/4) Over very ood c ivi y cross he bo rd.Shor es see i H & ower co ours.
Severe shor es wi be see for I-l co ours sor her m rke is he vi y buyi hese co ours
o y.
▲ +3.00 Some dem d for VVS/VS H-K co ours. Dem dfor VS/J-K co ours i cre si i +5 c r si es.
Dem d & c ivi y wi depe d upo ski prices. Hi her ski prices m y see ower
8 IDEX MagazInE – InDIa REtaIl | nO 01: SPECIal REPORt
What will diamond prices be during Diwali2011? The diamond and jewellery
retailing industries’ overwhelminganswer to that question has been “higher”. Onediamond dealer, who requested anonymity,noted that higher prices were widely expected for a variety of reasons. First,he said, despite the many publicly
voiced fears of a double-dip recessionin the US, the industry doesn’treally see any major threat to thefragile recovery of the Americaneconomy. This doesn’t meanthey expect any growth out of the US market, but rather thatthings will remain stable, withno drop from current levels of demand. This status quo, coupled
with strong growth in eastern markets,particularly China and India’s own domesticmarket, means almost certainly that diamondprices will be higher by Diwali 2011.
Another factor that many other diamond dealershave noted, is that the cur rent shortfalls in diamond
production are likely to be exacerbated as workersmigrate away from the diamond polishing industry to agriculture and agriculture-based industries.This is because the diamond industry is no longerthe top-paying among comparable industries thatemployed untrained labour and agriculture, with agood monsoon and surging consumer demand, is ableto pay comparable or even better prices. Once these
workers, leave, industry watchers note, they nevercome back to polishing diamonds. This is testified
to by the fact that the diamond polishing factories incentres li ke Surat have not been able to come back up
to full production capacity because the labour thatleft during the recession, has not come back even to
this day. With more likely to walk away from theindustry, production shortages are only likely
to get worse.
“The only way this can be remedied,”this diamond dealer noted, “is if the
diamond industry pays its workersmore. And the only way they canpay their workers more is if eitherrough prices go down or polishedprices go up.” Both of these options,
the diamond dealer notes, are toughasks in the current market and so he
thinks the result will be a combinationof the two. A limited reduction in polished
prices and a small increase in polished prices.
Explaining this, he notes that the miningcompanies are going to strongly resist going
down with rough prices, but will probably haveto do so to some extent as they will face a sharp
fade in demand if cutting centres like India don’tsee current prices as b eing viable. Given the fragilenature of the recovery in the US market and thelack of comparable purchasing power in the growthmarkets like India and China, raising polished pricestoo is a difficult proposition. However, continuedgrowth in the Indian and Chinese consuming marketscoupled with a continued but slow recovery in theUS, will probably allow a small rise in polished prices,he notes.
Predicting Higher Diamond PricesNext Diwali
Despite differences in perspective, leading opinion in both the diamond processing and jewellery retail industries predicts higher diamond prices by Diwali next year.A look at why they are so confdent about higher prices.
By Vinod Kuriyan
EMERalD JEWElInDUStRIES
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 7/22IDEX MagazInE – InDIa REtaIl | nO 01: SPECIal REPORt
Mehul Choksi, chairman and managing directorof the Gitanjali group, which apart from being agiant diamond manufacturer, is also one of India’stop jewellery retail chains, is emphatic when hesays, “I don’t see any problems in the medium term.Diamond prices are definitely going to be higher by Diwali 2011.”
It must be noted though that the diamondmanufacturing industry doesn’t see prices rising asa result of a smooth upward pressure. Most expectcurrent price levels to remain unchanged throughto the end of the Christmas buying season this
year. January 2011 is when they expect the price correctionsto happen as manufacturingdemand fades rapidly in thepost-Christmas period. Rough
prices wil l then probably have toundergo a downward correction,most think. Later, as productionshortages get worse, there willbe a steady but strong upwardpressure on polished prices.
The Indian diamond jewellery retail industry, however, seesdiamond prices in the mediumterm as being affected by factorslike the general state of theeconomy and the strength of therupee, that affect the consumer’spurchasing power. Coupled withthis, they see the perception of
value and a willingness or resistance to paying morefor a product as being significant in determiningdiamond prices in the medium term.
Ravinath Mohandas of V.N.M. Jewel Crafts inKochi thinks that economic conditions will bethe determining factor for diamond prices in the
medium term. “People are, in a small way, turningto diamonds. Diamond sales won’t match those of gold as long as gold prices stay high. However, if there is a crash in the pr ice of gold but the economicconditions are good, diamonds will sell even if their prices are higher.” He observes, however,that a consumer perception that diamonds aren’t
worth higher prices could be a real damper to any significant price appreciation. This perception couldcome about because there is a real chance that other
products are seen as better investments. Diamonds,he believes, will not fall behind other products interms of the customer satisfaction they offer.
Mohandas thinks that a shortage of diamonds, asmany experts predict is almost a certainty in themedium- to long-term future, could well lead to asignificant market for recycled diamonds in India, the
way there is in gold. His prediction is that diamonds won’t appreciate more than between 10- and 15percent by Diwali 2011. “As the rupee appreciates,it will be difficult for Indian diamond prices to goup substantially,” he notes.
K Srinivasan of Emerald JewelIndustry India Pvt. Ltd. of Coimbatore, however, doesn’tthink there is much scope for a
rise in diamond prices in India.“India is a very price sensitivemarket,” he notes, adding, “itresists any kind of price rise.” Inanswer to a question whetherdiamonds would be considered
value for money even with higherprices as they help offset the highprice of gold in jewellery, he notesthat diamonds are not consideredan investment and so wouldn’tbe considered as helping offsetthe high gold prices. He statessuccinctly that higher diamondprices will bring trading volumesdown. He does think, however,
that Indians would be willing to pay more fordiamonds as against higher prices for rubies, emeralds,sapphires and other coloured gemstones.
Srinivasan thinks that by Diwali 2011, diamond pricesin India will be at least 5 percent higher than they
were during the festival this year.
Suresh V.N., diamond manager for the Joyalukkasgroup, thinks diamond prices in India will go up dueto the country’s fast-paced growth. “While a weakdollar against the rupee will affect rough diamondprices,” he says, “the appreciation of the rupee willgive Indians greater purchasing power and Indianconsumers will be able to take a 30 percent rise indiamond prices. So we are expecting this industry to outperform expectations in the near future.” ■
Prices are in Rupees Per Carat Powered by www.idexonline.c
This price list reflects b enchmark retail prices for polished diamonds. Diamonds may, and should, sell at discounts compared to this list.For more education on prices and discounts please visit ww w.idexonline.com. Copyright 2009 by IDEX Online S. A. All rights reserve d.
DRAFT – DECEMBER 1st 2010
THE DIaMoND RETaIL BENcHMaRKDIaMoND RETaIL BENcHMaRK FoR PoLISHED DIaMoNDS
Prices are in Rupees Per Carat Powered by www.idexonline.c
This price list reflects b enchmark retail prices for polished diamonds. Diamonds may, and should, sell at discounts compared to this list.For more education on prices and discounts please visit ww w.idexonline.com. Copyright 2009 by IDEX Online S. A. All rights reserve d.
DRAFT – DECEMBER 1st 2010
THE DIaMoND RETaIL BENcHMaRKDIaMoND RETaIL BENcHMaRK FoR PoLISHED DIaMoNDS
DRAFT – DECEMBER 1st 2010
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 12/2216 Magazine – india Retail | nO 01: COVeR StORY
A feature of thisyear’s Diwalijewellery salesseason has beenthe rapid growthof consumer
assurance initiativesfor diamonds allaround the country.And while saleshave sparkled,the call for greaterstandardization
in pricing andassurance schemeslike buy-backs hasnever before beenas loud. A report onthe Indian jewelleryretail industry’sperception of theneed and what’sbeing done about it.
I ndian jewellery retailers have for centuries maintainedthe value of the plain gold jewellery they have soldbuy instituting buy-back programs. Diamonds andcoloured gemstones, however, have long languished
in a confusion of ad hoc schemes inst ituted by individualretailers according to their own individual norms. This state
of affairs lasted so long only because diamond jewellery constituted just a tiny fraction of the total market.
Not any more. Ever since De Beers entered the Indianconsuming market with a slew of diamond brands andan aggressive umbrella campaign, all around the country,demand for diamonds has grown exponentially. Diamondjewellery is today the fastest growing segment in the market. While there are no official figures, Mehul Choksi, chairmanand managing director of the Gitanjali group, that sel ls araft of branded diamond jewellery all over India, includingGili, one of India’s first diamonds jewellery brands, as wellas Nakshatra, Asmi and Sangini, erstwhile De Beers brandsthat whetted the Indian consumer’s appetite for diamonds,estimates the size of the Indian diamond jewellery marketat a whopping Rs.25,000- to Rs.30,000 crore ($6-$7 bil lion).“The way I calculate it,” he says, “is that the Indian retaildiamond jewellery market consumes roughly Rs.13,312 crore worth of diamonds ($3 billion), another 4,437 crore ($1bill ion) in gold. Factor in a profit margin of approximately 50 percent and you get my estimated total.”
Whatever the actual figure, there is no getting away from
the fact that domestic demand for diamonds has never beenhigher. Along with this demand, the need for consumerassurance too has grown equally fast, spilling over fromthe metros and Tier-I cities and pushing decisively intoTier-II and smaller towns.
These consumer initiatives broadly hinge on two planks –stone certification and buy-back programs. Together, theseprograms help maintain the value of diamond jewellery and are catalyzing the move to viewing larger or betterquality diamonds as storehouse of value, much the same way gold has been viewed in the country for millennia.But an important difference between the plain goldand diamond jewellery markets is that whereas the firstcategory is usually held long term and only traded in duringexigencies or occasions like family weddings to generateeither cash or new bridal jewellery, diamond jewellery buy-backs, especially at the lower, mass-market end ,arealso driven by fashion. Consumers are ready to trade intheir diamond jewellery for newer styles and designs.Thus consumers of even the mass-market jewellery inthe lower price ranges have a strong requirement for
assurance programs that guarantee them a holding valuefor the product they buy.
K. Srinivasan of Emerald Jewel Industry India Pvt. Ltd.,a manufacturer who supplies retailers, offers certifieddiamonds and buy-back schemes for them as a productand service guarantee, however cautions that in his view,diamonds are sti ll a long way from gaining the storehouse-of-value perception that gold enjoys in the country. “Thereis nothing to beat gold as an investment option for thegeneral consumer,” he notes, adding, “diamonds are still far
away as an investment option.” But he nonetheless offersassurance programs for all sizes of diamonds and affirmsthat these initiatives help maintain their value. As he putsit, “Transparency in the grading systems and in valuecertification will help boost consumer confidence and themove to buying diamonds as an investment tool.”
The Joyalukkas group, another big operator in the southernmarket, has also embraced consumer assurance schemesfor diamonds in a big way. According to Suresh V.N.,the group’s diamond manager, notes, “ We at Joyalukkashave very good sales in diamonds. All our diamonds areIGI certified and we offer our customers a 100 percentbuy-back guarantee.
But it isn’t only the larger and better stones that are now being offered with assurance programs. Indeed, even mass-market diamond jewellery brands are offering consumersquality assurance. The challenge to consumer assurance
with diamonds, notes Gitanjali’s Choksi, is that there isn’ta single price to a diamond – the fact that for a stoneof a given size, there could be any number of variations
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 15/22Magazine – india Retail | nO 01: COVeR StORY
measure of standardisation? “The geographic variety of theIndian market,” says Kanwaljit Singh of Singh Diamondin Mumbai, “leads to a great variation in the mark-up ondiamonds at the retail level. In the northern markets, they
love diamonds, but they want the biggest bang for theirbuck. So the diamonds are the more inexpensive kind -lowerclarities and colours. But the overall cost of the piece is alsokept down by using lower karatage for the gold and so thediamonds still constitute up to 60 percent of the componentcost of the jewellery. When you factor in the retail mark-up onthe whole piece after adding making charges, obviously, thediamond values are marked up by a much higher percentagethan in the southern markets, where they take only thehighest quality – and thus far more expensive diamonds. A comparison of two similar pieces with a exactly the same
carat weight in diamonds would show a five-fold increase inthe cost of the diamonds for the southern market. Naturally, when you factor in the total mark-up, the appreciation inthe price of the diamonds is going to be much less. So youreally can’t say that the diamonds are overvalued in onemarket and undervalued in the other. It’s in the nature of the consuming pattern in each market.”
Still, the consuming market could be made to understandregional differences in prices as long as consumers areconfident of the quality of diamonds they buy. This is
where the Indian market runs into extremely uncertainterritory. Bachhraj Bamalwa of Nemichand Bamalwa inKolkata, the incoming president of the All India Gems& Jewellery Trade Federation (GJF), in his inauguraladdress at the GJF’s annual general meeting earlier this
year, highlighted the need for the jewellery retail industry to convey rock solid quality assurance to consumers whenhe asked the question, “Does the Indian market need aregulatory authority to maintain standards among diamondgrading laboratories?”
Bamalwa was referring to the fact that in many areas,there are small, one-room shops that call themselves“grading laboratories” and offer certi ficates for as littleas Rs.50. Most of these “labs” have nothing more than asingle microscope and offer certificates that are severa lclarity- and colour grades higher than what a reputed
world-class laboratory would. These small shops, he
observed, posed a real threat to consumer confidence, which is why he was even willing to consider governmentregulation of laboratories. Many retailers have seen thepointlessness of certificates from such “labs” and have,like Mohandas in Kochi, opted to provide their owncertification and stand behind their own productsinstead.
But there is still a strong need for third-party certification. Which is why Bamalwa posed the question to the GJF’sgeneral body of whether they should even consider agovernment initiative in the matter. The problem withthis idea, though, is that government infrastructure hasbeen woefully inadequate even with the primary need forproviding gold hallmarking services around the country.Most of GJF membership present felt that asking thegovernment to also look after diamond certification wassomething of a hopeless cause from the very outset.
While agreeing with this Bamalwa noted that this meant thatretail industry had to collectively do something to providethis much-needed assurance to the Indian consumer. Mostof the retail industry agrees that collective action needs to
be taken on a combination of initiatives including third-party certification, good buy-back programs and above all,standardized pricing for diamonds.
Much of what consumers perceive as value, depends ontheir confidence that the perceived va lue of the productis uniform throughout the marketplace and that this
value can be unlocked at any time through a standardizedmechanism. Bui lding up this confidence is key to enablingdiamonds compete successfully with the wide range of luxury products that now aggressively vie for a share of the consumer’s wallet.
As Gitanjali’s Choksi sums it up, “India is a very big country and the industry must come together to educate theconsumer on diamonds. All the retailers, manufacturersand associations should come together to do this on amassive scale. In our business, providing an investmentguarantee of the product is as important as selling it forits beauty. There must be trust and confidence created inthe consumer’s mind ■
VnM Jewel CRaftS
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 16/22IDEX MagazInE – InDIa REtaIl | nO 01: REtaIl Et CEtERa
RetailE t C e t e r a
True Love Never DiesValen ine’s Day lies jus over he Holiday Humpand hese pieces make a hear of s one burnred wi h desire. true love never ends, bu loversgive he gif ha las s forever … jewelry. Reds andpinks, hear s and arrows – hese las ing loveliesare sure o “be mine.”
JEwElRy by bOb EXpORtfOR gOlD EXpREssIOns
Birds of a feather stick togetherRemind your lover o the season o love andspring with these pieces rom B b exp
g l exp . Pouring down likedroplets o rain, these eathered pieces focktogether with furries o yellow, white and pinkgold in the Tropical Fantasy collection.
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 17/2224 IDEX MagazInE – InDIa REtaIl | nO 01: REtaIl Et CEtE
for the faint of heartesss nza for gold expr ssions lets contrastingenergies unite in yellow and black gold creatingunique and passionate forms for those whose
romantic preference is less frilly and more edgy.The Making Love collection uses gold and hermatite
charms to capture the eye and the heart.
i Love goLd!Naturally, who doesn’t? Israelis designer, d ps m tenderly hand-cra ts 18 karat into romanticnatural elements that bring a calming and sensual
eel to each piece. Why not think out o theromance box and count the years o your loveusing the metaphor o the rings on a tree?
MetaLLic L’aMourIn the My Way 2 collection, Italian designerg l p g l exp solidly expresses the notes o love with bold heartsshining bright with metallic sheen. Striking andpassionate, the collection’s depth has avant-gardecharacteristics.
JEwElRy by EsssEnzafOR gOlD EXpREssIOns
JEwElRy by gOlDspIRItfOR gOlD EXpREssIOns
JEwElRy by DapHna sIMOn
8/7/2019 IDEX India Dec 2010 No Hindi
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 18/22IDEX MagazInE – InDIa REtaIl | nO 01: REtaIl Et CEtERa
tickLed Pink
Nothing says love like pink sapphiresand amethyst jewelry. al c ’ design
sparkles in rose and purple rings, earrings andpendants. There are even surprises underneatheach piece with ornaments inside the rings o stars, moons and hearts.
ring in the seasons ll gives more heart than ever this season
with an array o heart rings or every taste. Forthe ambiguous amore, a sterling silver and rosequartz ring etched with romantic design onthe band. For the bold, a 14 karat white goldheart shaped amethyst and diamond ring willignite the heart in purple passion.
G lobal polished diamondprices slipped during thefinal week of October,
after holding relatively steady duringthe early part of the month. In fact,prices declined even further due tothe weakening of the dollar.
The IDEX Online Polished DiamondPrice Index averaged 117.8 forOctober, ending the month at 117.2,and remained near that level in theearly days of November.
The IDEX Online Global PolishedPrice Index decreased a modest0.2 percent from September and
increased a strong 8.4 percent overthe average for October 2009.
Uncertain demand for polisheddiamonds, especially ahead of theall-important holiday season in theU.S. market, appeared to have causedretailers to cancel backup ordersfor diamond jewelry. As a result,diamond suppliers with excessgoods were forced to reduce prices
in an effort to move inventory. Weak U.S. Dollar alSo
HUrtS DiamonD ValUeS
There was also more disturbing news.Globally, diamonds are traded in U.S.dollars. Since the beginning of the year, the U.S. dollar has lost at least 5percent of its value against a basket of diamond currencies. As a result, real
prices of diamonds began to fall whenthe U.S. dollar’s decline commenced.
On a constant currency basis, IDEXOnline Research estimates thatglobal polished diamond pricessince September have fallen by atleast 6 percent, if not more, fromlevels earlier this year, on a constantcurrency basis.
riSing golD Price HUrtS
real DiamonD PriceS
The U.S. dollar has weakenedsubstantially against the price of gold. Since January, the price of gold has risen by 24 percent from
$1,099 to $1,360, although it wasslightly higher in mid-October.Consequently, the value of the U.S.dollar has fallen a substantial 24percent when compared to theglobal currency of gold.
Weak DiamonD PriceS:
iDeX online iSSUeS early
Warning
The IDEX Online Global PolishedPrice Index, which is based onreal-time trading data, showsthat polished diamond pricesare softening. In contrast, somepolished diamond price informationpublished by other services suggeststhat prices are “stable.”
Why this dichotomy? IDEX OnlineResearch reports diamond pricesin real time posted by diamondsuppliers. There are no “marketadjustments.” IDEX Online neither
owns nor trades diamonds.
DemanD in a FeW marketS
remainS relatiVely Stable
Globally, the uncertain economy hashad a negative impact on demand
http://slidepdf.com/reader/full/idex-india-dec-2010-no-hindi 20/22IDEX MagazInE – InDIa REtaIl | nO 01: pOlIsHED
for polished diamonds and diamondjewelry. Not only has the economicrecovery been characterized by spikes and dips in demand, butthe economy is taking far longerto rebound than in prior recovery cycles. As a result, diamantairesare getting mixed signals fromthe market, with no firm trend orpattern emerging.
While demand for diamonds anddiamond jewelry remains stable intwo emerging markets – China andIndia – neither of these marketshas a significant impact on globalpolished diamond demand or prices.Together, these two markets account
for an estimated 10 percent or lessof total global demand (by value)of polished diamonds. In contrast,the U.S. market consumes roughly 45 percent, by value, of the world’spolished diamonds and diamondjewelry.
SHort-term ForecaSt
Uncertain
The IDEX Online Research survey of retail jewelers shows that theaverage ticket for an independentspecialty jeweler dropped by 9-10percent during the recession, and isshowing no recovery. The only goodnews is that the number of salestransactions is on the upswing.
Forecasts for near-term diamonddemand are less rosy. We areprojecting that diamond jewelry sales could be down by as muchas 5 percent in the U.S. duringthe November-December holiday
season, with unit sales down asmuch as 15 percent.
Instead of diamonds and diamondjewelry, consumers have focusedtheir spending on less expensivesilver jewelry and lower-karatagegold jewelry. Popular priced fashionjewelry – mixed metals and a variety of colored gemstones – seem toappeal to today’s jewelry shopper.
Until demand for diamond jewelry solidifies at the retail level in the U.S.market, polished diamond pricesare expected to trade in a narrow range, with little support. Clearly,there is not enough demand to pushprices higher. Unfortunately, the riskremains high for downside pricemovement. ■
gRapH 2U.S. Dollar to Diamond Currencies – 2010
source: OanDa
+4.0%
+2.0%
+0.0%
(2.0%)
(4.0%)
(6.0%)
(8.0%)
(10.0%)
Ru eeEuro sa R dC di $
(4.7%)
(6.3%)
(3.1%)
(8.5%)
3.4%
au tr li $
tHe iDeX online
DiamonD Price inDeX
The IDEX Online Diamond Price Indexis a real-time index derived from actualasking prices in the global diamondindustry. The IDEX Online DiamondPrice Index objectively reflects pricetrends as they happen. The DiamondIndex and Diamond Drivers wereformulated following comprehensiveresearch and analysis of the IDEXinventory database, aggregated since2001. Research and development wereconducted in cooperation with Dr. Avi Wohl, senior lecturer of Finance atthe Faculty of Management, Tel Aviv University, Israel.
Further information is available fromIDEX Research. The e-mail address [email protected].
People have revered diamond as a precious productof nature for thousands of years, especially inIndia where the tradition of diamond trading and wearing dates back some 3000 years.
In the last half century, scientists have discovered ways toalter the appearance of natural diamond: namely to improveclarity and improve or change color. While t reatments canmake difficult-to-sell diamonds more attractive, they dopresent identification challenges to the industry if soldundisclosed.
Detection and disclosure is the key. Diamond treatments arelegitimate and can make some diamonds more marketable,but the need for positive, ethical disclosure is essential toprotect the trade and consumers.
Treatments For ColorScientists have experimented with many ways to changeand modify diamond color.
IrradiationSir William Crookes was the first to change diamond colorby irradiation. He buried diamonds with radium salts forone year in 1904, which turned them green. Unfortunately,it also made them highly radioactive.
Development of nuclear reactors, particle acceleratingmachines, made treatment of stones easier. This causeddamaged to the crystal lattice of diamond, altering lightabsorption, therefore the visible color. This treatmentresulted in only shallow penetration of atomic particlesinto the diamond, causing distinct color zones.
Researchers developed the linear accelerator in the 1900s.This also accelerates atomic particles, but along a straightpath rather than a circular one.
DV
Diam ndTreatmentsToday, penetration with high-energy electrons in a linearaccelerator is one of two frequently used ir radiation techniques.Depending on the material and treatment conditions, thisprocess usually produces blue or blue-green colors.
The other technique involves bombardment with neutrons,usually in a nuclear reactor. Diamonds treated this way usually become green, blue-green, or dark green.
Both of these modern processes produce uniform color without zoning because the electrons and neutrons penetrate very deeply.
Color-modifying irradiation treatment always comes aftera diamond is cut and polished.
Irradiated colors are sensitive to heat. Technicians use coldrunning water to prevent color changes during the irradiationprocess, which generates a lot of heat.
After the gem is set, the heat from jewelry repairs , recutting,or repolishing might also change its color.
A controlled heating and cooling process called annealing,is another way to change diamond color.