Sometimes it seems every gemstone on the planet earth is for sale at the Tucson Gem Show. Not to mention the massive amounts of crystals and minerals that are traded at the show. Millions of dollars worth. We are all led to believe that colored gemstones are rare. After days of scouring these shows, you begin to wonder. After a few hours, it becomes apparent that sensory overload is taking control. Wasn't the same tanzanite for sale at half the price at the last booth? It is only after a few days that you finally realize the finest, top quality gems are truly rare.
The "magic triangle" remains the GJX, GLDA, and the AGTA shows. These shows are situated within walking distance of each other. All three shows now overlap over a 7 day period. Buyers have less time to wander from show to show searching for bargains.
The consensus among dealers was that Tucson 2000 was a success. Most dealers reported strong sales over 1999. Either the first day or the first two days were the strongest at all shows. It appears there was a pent-up demand as buyers had shopping lists and were going to buy exactly what they needed and leave. Scouts for big time collectors were also visible at the show. They would find what the collector wanted, make a cell phone call and buy the product.
Here is our analysis of the stones we monitor:
Mogok: We heard two scenarios as to why Mogok is closed to foreigners. One is the Burmese government, known for its paranoia and xenophobia, believe they have uncovered a CIA plot to overthrow the government. A major gem dealer started financing Baptist churches in and around Mogok. Since the government is having problems with the Karens, it does not want another fight for religious reasons. The gem dealer was arrested and thrown in jail for 20 years. In Burma, you can be a friend of the government one day and an enemy the next. The churches were closed and all foreigners were banned from Mogok.
The second scenario is the Burmese government was losing tax money in Mogok. Every non-Burmese gem dealer is supposed to pay a 10% tax on every completed transaction. Even though the foreign gem dealers were accompanied by a Burmese government agent, the gem dealers and sellers would bribe the agent and under-report the sales. The government got wind of this situation and halted all foreign buyers.
Many people in Burma are hoping the ban is lifted or the edict forgotten about. Some wait for General Ne Win to die, but the officials below him are just as corrupt. The reality for foreign dealers is you need serious bribe money to get close to Mogok. However, we do not recommend this or you may find yourself in a jail cell. Some dealers with contacts in Burma are having goods brought to them in near-by cities. The bottom line is production is down over 80-90% and prices are strong. These stones are the number one hard asset collectible because they have been coveted for centuries, are not heated, are ultra-rare and the supply is dismal.
Mong Hsu: A dealer from Thailand at the GLDA had the most amazing display of Mong Hsu ruby. He showed row after row of goods in all shapes and sizes. You could buy Mong Hsu from melee to a 4 carat at $50,000.
The hottest stone of the show was blue sapphire. There were plenty of goods from Madagascar and Ceylon. Less available were sapphires from Burma or Kashmir. I saw one three carat, AGL graded Kashmir sapphire for $13,000 per carat but, it was 90 tone. Sapphire does not seem to suffer the treatment problems of emerald or Mong Hsu ruby. It is accepted that 99% of the goods are heated. Sapphire is popular because it is relatively inexpensive compared to emerald and ruby.
Tanzanite was available in large quantities throughout the show. There was resistance to higher prices. One tanzanite dealer said, "I am sorry my prices are so high. I would not buy it either." It remains easier to find a 10 carat blue than a small blue stone.
Emerald booths were probably the least attended of any at the show. This signifies the emerald market remains weak. However, one dealer told us, "Emerald was our best seller. We are seeing an increase in demand by retailers. The public will always have an insatiable demand for the green gemstone, despite the treatment problems." We also noticed one Colombian emerald dealer's booth was extremely busy. Many people were making low offers on his material. He was resisting, but this at least is a positive sign for the emerald market.
The spinel market is picking up, especially fine gem reds, hot pinks, and flame oranges. This market has been extremely quiet the last few years. However, the closing of the mines at Mogok to foreigners has dwindled supply. Prices are up 15-20%. A major spinel dealer told us, "The cost of production is up at Mogok, Burma. Plus, the prices of rice, petrol, and labor are up. It is becoming too expensive to mine in Mogok. Many joint ventures between privates and the government in Burma are collapsing. "
Madagascar Color Change Garnet
There was an excellent supply of the new Madagascar color change garnet at the show. It changes from blue to an amethyst color. The gem is usually not found in large sizes. The material either has an excellent color change and a dark tone, or a light tone and a weak color change. It was a popular stone and was marketed as a "poor man's" alexandrite. A great new stone for garnet collectors at under $1000 per carat.
Nigerian Spessartite Orange Garnet
A major hit at the Tucson gem show was the new orange garnet. Retailers, custom jewelers, and other dealers like the stone because it is inexpensive, not treated, clean, and extremely well cut.
The tsavorite market is confusing. Dealers say it is up, down, or stable. The market is driven by rumors. However, in Africa, prices are strong. Sales of tsavorite seem larger compared to 1999. One problem is tsavorite is now mined in three areas, Kenya, Tanzania, and Madagascar. The best colors are from Kenya, the Tanzanian colors are too light, and the Madagascar gemstones are too small. Stick with the old color Kenyan material.
We saw some old stock Paraiba tourmalines. The colors were electric green and seafoam blue. At the AGTA show, we saw some multi-carat Paraiba tourmalines between $10,000-15,000 per carat.
Another stone that was popular at the show was the relatively new gem red and fuscia pink tourmaline. Dealers are seeking the gemstones that are not horribly included. The old original pink material from last year is becoming scarce.
Pink Madagascar Sapphire
The show also had an abundance of hot pink or "lipstick" Madagascar sapphire. Although the material is heated, it is similar to Ceylon pink sapphire at a fraction of the price.
Mandarin Orange Garnet
The supply of mandarin orange garnet is minuscule. Alan Roup of G.E.M. Namibia, Jerusalem, Israel had only three mandarins over 2 carats. Approximately 90% of his goods were below a carat. According to Roup, "The rains were horrible for us this year. Our mines were flooded for months. We finally pumped out all the water and are now back in production."
A relatively new stone is Grape garnet from Orissa, India. It tends to black-out at sizes above three carats. It has a very unique amethyst-like color, unseen in any previous garnet. Garnets are not normally enhanced, which is a bonus for collectors. An inexpensive sleeper.
The colored gemstone market remains strong overall. That is not to say there are not problems with certain stones, such as treatment issues with emeralds, or the weakness of tanzanite, but market corrections are normal. The bottom line is, as the US economic boom continues for an unprecedented term, colored gemstones are a beneficiary of this wealth. Expect a strong market for the foreseeable future.
The reserve on the oval 1.66 is $200,000 - $300,000, or about $120,000 to $180,000 per carat. Sotheby's recently sold a .90 vivid green, VS clarity for over $730,000 per carat. Although vivid green is more green than intense green, the 1.66's size makes it attractive. If you compute a fancy intense discount of 1/2 the price of a fancy vivid, then add a 40% premium for the carat plus size, the fancy intense could sell for over $500,000 per carat. Anything less would be a steal. Look for this stone to be very well received at auction.
The second fancy intense green is a 1.72 radiant which will be offered in a collection with a radiant 1.20 fancy intense yellowish green. (Also, believed to be VS clarity.) In addition, the group includes two blue diamonds. The entire group is being offered at an estimate of $150,000 - $200,000. Contact Christie's for more information.
In the mid-eighties, the Hancock family faced a dilemma. As heirs to a ranching family, they owed the IRS approximately $1 million in estate taxes. Although the family business was asset-rich, they were cash poor. They did not have the money to pay the IRS. The choice was either sell the family business, or sell Mr. Warren Hancock's collection of colored diamonds that he had been hoarding for years. Everyone in the family thought the patriarch was a little crazy for collecting diamonds; but it was his money so what could they say? He enjoyed his colored diamond collection. The heirs loaded up his entire collection of hundreds of colored diamonds and sent them to Christie's. They were hoping the selling of all the colored diamonds would help offset some of the tax due. They explained their situation to Christie's. To their surprise, Christie's chose three diamonds, and sent the rest back. The three stones were a .95 red, a .59 purple-pink, and a .54 reddish purple.
The presale estimate on the .95 red was $150,000 per carat. Many insiders believed the stone would never sell at all due to the stone's clarity problems. Bidding began at $250,000. Many dealers and retail jewelers bid the stone to $500,000 in $10,000 increments. It sold for $880,000, plus a 10% buyers commission, or $926,315 per carat on April 28, 1987. This set a new world per carat price for any gem that remains today. The Hancock diamond humiliated the previous record of $127,000 per carat for a 7.27 pink diamond in 1980.
The auction house sent the heirs over $1 million which was used to pay off the IRS debt. Not only did this save the family business, but the family retains over 99% of the original colored diamond collection. Another amazing fact is that Mr. Hancock bought all of the diamonds from his local jeweler at retail prices. The jeweler would routinely mark-up the stones 100% before selling them to Mr. Hancock. All three diamonds were purchased in the 1950s. Mr. Hancock paid $13,500 for the .95 red that sold for almost a million dollars. He had less than $20,000 into the three diamonds that sold for over a million dollars.
Why did the stone sell for such a high price? The .95 red has the color of a gem Burma ruby and is considered the ultimate in rarity in colored diamonds. Warren Hancock must be considered the most extraordinary collector of the century due to his astute buying and phenomenal return on his original investment. Only time will tell how the new owner will fare.
"Consumers will begin to have a greater appreciation for gems that aren't enhanced in any way. We expect that this will increase demand for gems such as garnet."
Richard Hughes, author, JCK, January, 2000.
The FTC also checked whether or not such disclosures were offered on the same Web page as the advertised jewelry, or relegated to an information section in another part of the site. Disclosures located on different Web pages which requires prospective buyers to click off of the product in question do not meet FTC requirements. Internet gemstone, jewelry, and diamond dealers need to review their on-line ads more carefully to ensure consumers receive complete and accurate information. The FTC e-mailed each seller who ran afoul of the FTC Guides with instructions on how they can correct their problem. If your internet business is not compliant, the FTC may take action against repeat offenders. Be warned!
The FTC announced it will step up its enforcement of on-line auction fraud. The FTC received more than 10,000 complaints last year against 1000 internet auction sites. A new computer database is tracking repeat offenders.
Satellite and Cable Gem Shows
The Gemstone Forecaster thinks a great deal of the FTC and the vital job they perform for American consumers. We applaud their recent attempts to make disclosure mandatory in cyberspace. What bothers us is the total lack of disclosure on the 24 hour gem channels on satellite and cable systems running throughout the US. The amount of misinformation conveyed and total lack of any disclosure frightens us and is harmful to consumers and the industry. The use of intense lighting on the stones for sale may also be deceptive. Keep up the good work on the internet, but we'd like to see some enforcement on the airwaves as well.
The U.S. proposed a $1.6 billion aid package to help Colombia fight drugs. Opponents fear US involvement will result in another Viet Nam. The vote in the US Congress could come soon. The civil war continues between the Colombian military and the leftist Revolutionary Armed Forces of Colombia, or FARC.
FARC has humiliated the Colombian army on the ground, but the military is now using AC-47 gunships with night-vision equipment. Government planes and helicopters are cutting down insurgents crossing fields, blowing up guerrilla convoys on highways, and blasting rebel riverboats out of Amazonian tributaries. In addition to 18 US-built Black Hawks, the air force has sent into combat A-37 "Dragonflies" and OV-10 "Broncos" - Vietnam-era tactical fighters. The new US plan before Congress includes 30 Black Hawk and 33 Huey helicopters, an RG-8A reconnaissance plane, air base and radar enhancements and further upgrades to add night-vision systems to aging planes. The FARC, which has about 15,000 fighters, is one of two main guerrilla groups that have been fighting the Colombian state for more than 35 years. At least 30,000 people have died in the civil war.
FARC rebel commanders criticized the proposed US aid, saying it will only worsen the country's armed conflict. The guerrillas control about a third of the nation, earning huge payoffs from protecting drug traffickers' operations and taxing peasants who grow illegal drug crops. FARC has not used surface-to-air missiles, but has offered its fighters $2,500 for every military pilot they assassinate. Pilots at a Black Hawk base have been seen with the words "Born to Fly" taped on their helmets.
In January, God's Army, a breakaway part of the Karen National Union came under sustained attack by troops from Burma at their jungle base near the Thai/Burma border. The Karens have been fighting for autonomy from the Burmese central government for more than 50 years. God's Army comprises perhaps 200 fighters. Approximately 1,000 minority Karen refugees fled to Thailand. Thai troops fired artillery to prevent the fighters from crossing over the border.
The group's twin leaders, Johnny and Luther Htoo, are fundamentalist Christians who claim to have mystical powers. According to legend, the twins rallied their village in 1997 to avenge a government offensive in which the soldiers raped women, killed men in front of their families and set fire to their thatched roof homes.
Followers believe the twins offer them divine protection in battle, keeping bullets from hitting them and mines from exploding under their feet. Like most Karens, God's Army rebels are Christians in a predominantly Buddhist country. The twins have barred fighting, swearing, drugs and alcohol.
In an attempt to pressure the Thai government to help their beleaguered movement, members of God's Army hijacked a Thai bus near the border and forced the driver to take them 45 miles to Ratchaburi. Rebels wearing camouflage gear and masks forced their way into Ratchaburi provincial hospital. Thai security officials said the rebels threatened to blow up the hospital if attacked. Thai security forces stormed the hospital and killed nine heavily armed insurgents who had taken hundreds of patients, visitors and staff hostage. No hostages were hurt during the daylong siege, but two police officers were seriously wounded. About 900 people were believed to have been trapped in the walled, six-acre compound.
Burmese troops are facing resistance from ethnic Karen rebels along the border. God's Army, the rebel group at Ka Mar Pa Law, near the Thai border, was overrun by Burmese government troops. God's Army was not yet wiped out. The Burmese government was also fighting the 4th Brigade of the Karen National Union. The Burmese cannot destroy the Karen rebels because they employ guerrilla warfare strategy.
The loss of the Ka Mar Pa Law camp, a collection of thatched huts and a small Christian church where the fundamentalist followers prayed daily, marked the latest disaster for God's Army. After the fall of their headquarters, God's Army's estimated 100 fighters fled in three groups under its twin boy leaders, Johnny and Luther Htoo, and Su Bia, a veteran adult guerrilla, Thai military officials said. God's Army counterattacked against the Burmese troops. This fighting is a hindrance to smuggling goods across the borders.
The AGL is warning it is beginning to see Burma/African rubies and Kashmir sapphires that are treated with oils. This is done to improve clarity.
New Color Change Garnet
|The new color change garnet is from Bekily, Madagascar. The largest known faceted gem is 9.5 carats. The gems change from blue, green, gray in daylight to reddish purple in incandescent. Do not expect the stones to look like Burma or Kashmir sapphire blue. The blue is more synonymous with blue spinel. The color change is very similar to the Russian alexandrites' color change. The color change is due to high amounts of vanadium. Technically, they are a pyrope and spessartine combination. The stones have needle-like rutile inclusions similar to Burma ruby and sapphire.|
For more than 4000 years, emeralds have been treasured around the world as a symbol of eternal spring and immortality, prized by the Egyptians, Romans (Emperor Nero surveyed the gladiators through an emerald monocle), the Moguls of India, the Aztecs, and the crowned heads of Europe among others. However, the origin of most well-known emeralds has been obscured by the long shadow of history. Gaston Giuliani of the Institut de Recherche pour le Développement and the Centre de Recherches Pétrographiques et Géochimiques-CNRS in Vandoeuvre, France, Marc Chaussidon of the CRPG-CNRS, and their French and Colombian colleagues sought to clear up this mystery for nine historic emeralds spanning a time period from the Roman occupation of France until the 18th century.
These gems included part of an earring from the Gallo-Roman site of Miribel in France, an emerald from the Holy Crown of France placed there by the crusading Louis IX (St. Louis) in the 1200s, 18th century emeralds from the treasury of the Nizam, princely rulers of the former state of Hyderabad in India, emeralds studied by French founding mineralogist Abbé Hauy for his definitive description of the gemstone in 1806, and an emerald recovered from the famous wreck of the Spanish treasure galleon the Nuestra Señora de Atocha that sank in a hurricane off the coast of Florida in 1622.
The researchers were motivated to take on this project after work in mines in Colombia and Brazil revealed that the deposits from each geographic region--and often from individual mines--are characterized by very specific oxygen isotope levels. Oxygen isotope values in gems such as emeralds reflect the composition and temperature of the fluids that eventually crystallized to form the emerald, as well as the composition and temperature of the rocks that the fluids journeyed through before their consolidation into gemstone. There is a narrow range of these isotope values for each site where emeralds have been discovered worldwide. Along with more traditional gemological aspects, such as optical properties and the inclusion of other materials, researchers can use these unique isotope values to pinpoint where an emerald was "born".
To gather these isotope values, Giuliani, Chaussidon and their colleagues used a technique known as ion microprobe oxygen isotopic analysis. The method works by bombarding the emerald with an electron ion beam, which dislodges oxygen ions from the crystal lattice of the gem that the scientists can collect and analyze. This makes very small craters in the stones that are invisible to the naked eye. The virtually non-destructive method allowed the research team to reassure the curators of these priceless gems that their investigations would not cause irreparable harm, Giuliani said.
The isotope values of the nine emeralds in their study offer an unequaled glimpse at the mining and trade of emeralds from antiquity through the Age of Exploration. For instance, Egypt and Austria were thought to be the only sources of gem-quality emeralds in the ancient world, and the researchers did find that the Holy Crown and Hauy emeralds came from mines in these areas. However, they traced the Miribel earring stone to Pakistan, a previously unrecognized source of emeralds in antiquity. And according to the isotope data, one of the stones from the Hyderabad treasury in India originated in Afghanistan. "The deposits in these areas fall along the old Silk Route," Giuliani said, "and it may be that they were mined or collected there as traders passed though, and brought to Rome and France and elsewhere."
Also surprising was the origin of the remaining three emeralds from the Hyderabad treasury, often known as "old mine" emeralds for their supposed source in lost mines of Asia. Some scholars believe that these emeralds may have made their historical debut as far back in time as the days of Alexander the Great (around 300 B.C.), eventually finding their way into the opulent coffers of the Nizam by the 1800s.
Instead, the isotope analysis showed that these prized stones came from three separate mines in Colombia, indicating that the trade in emeralds from the New World made rapid and significant inroads into Europe and the Near East. Analysis of the emerald from the wreck of the Nuestra Señora de Atocha reveals a Colombian origin for that gem as well, providing further direct evidence of the Spanish role in bringing New World emeralds into Old World trade.
The researchers speculate that many of the emeralds held in large museum caches of treasure in modern-day India may come from Colombian mines, as well as from old Asian sources such as Afghanistan and Pakistan. "Colombian emerald deposits are unique in the world, producing stones with richer color, clarity, and bigger crystals than most emerald deposits," Giuliani said. "We imagine that these were the qualities that the Spanish, and the rest of the world, were interested in."
The researchers plan to apply the oxygen isotope technique to studying rubies next, after completing the necessary survey of the geology and geochemistry of ruby deposits around the world. "This type of analysis was a small part of our work initially," said Giuliani. "But we see that as geologists working with gemstones and gemologists, we may be permitted to make a contribution to the study of trade and human history.""
Jury Finds Celebrity Jeweler Guilty
February 25, 2000
"MIAMI (AP) - A jeweler who catered to celebrities such as golfers Jack Nicklaus and Greg Norman was found guilty Friday of selling cheap imitations of pricey gems in an $80 million fraud case. Jack Hasson, 47, is facing up to 65 years in prison and $162 million in fines on six counts of fraud. A sentencing date has not been set.
Prosecutors, who nicknamed the Palm Beach area jeweler "Mr. Fraud", charged he sold fake, flawed, filled, irradiated and painted jewelry as the real thing. Hasson also allegedly swapped real stones with fakes on pieces brought in for cleaning, appraisal or sale.
Prosecutors said that in one instance, Norman paid $48,875 for a brooch shaped like his shark trademark that was supposed to be made of rare blue, orange, green, black and pink diamonds from South Africa. Instead, he got cheap painted stones. Nicklaus charged he complained to Hasson about getting a fake stone in a $35,000 diamond and ruby ring, and Hasson replaced it with another fake.
Another customer, Aben Johnson, thought he bought actress Loni Anderson's engagement ring, jewels from the Getty estate and the collections of Dior and actress Carole Lombard, among other items, according to court records. Johnson claimed $60 million in losses on $80 million in purchases. Hasson remained in jail Friday, and defense attorney David Tucker said he will file an appeal."
This is an excellent article for those who believe it is simple to buy gemstones overseas. We look forward to Ted's new book. ED.
"The first rule of thumb when buying colored stones in Thailand is that knowledge is a lot more valuable than a large roll of cash. And when you go to a town like Maesai, a major entry point for smuggled rubies, sapphires and jade from Burma, you'd better know what you're looking at. The local hustlers and hawkers flock to you like vultures, digging through their pockets for parcels of gemstones dipped in red tamarind juice, holding the goods up to the light, thrusting them into your hands to see for yourself.
The street vendors have a little bit of everything. Their glass display cases contain jade, rubies, sapphires, quartz, amethyst, agates. Nine times out of 10 they'll try to pass off flame-fusion synthetic ruby as the real thing, even after you drop hints that you know what you're doing. Next up are the jewelry stores. You may see a shop hawking Buddha carvings of jade or ruby. Take a second look at the carvings with an odd mix of ruby and some green gem material and something twigs in your mind: This is that ruby and zoisite coming out of Tanzania in huge boulders. Ask the woman behind the counter what the stuff is. In Maesai, she may say it's ruby from Burma. Her counterpart on the other side of the border in Tachilek says it's jade. Whatever the answer, you're always guaranteed a little chuckle to yourself.
If you know what you're looking for and roughly how much it should cost, you go to the trading tables which deal almost exclusively in rubies. In all Thai gem trading towns, the ruby trading is concentrated in one area or street, where you can buy a single cut stone or kilos of rough straight from Mogok or Mong-Hsu. The low-grade material can be found right on the street tables, while the better quality goods are traded behind closed doors. The markets are open from the morning to the early afternoon to take advantage of the best light for examining ruby.
Trading at the tables is conducted through a network of brokers. You pull up a stool and wait for them to approach you. Brokers with consigned gems turn up to show you their goods and give an asking price. You examine the goods and make a counter-offer, writing it on the parcel itself, sealing it with scotch tape and signing the seal to insure that the stones aren't switched. The broker brings the sealed parcel to the owner. If the offer is accepted, the broker returns with the sealed parcel, you check for your signature, break the seal and after confirming that no tampering has taken place, make the payment. An unacceptable offer will return with the simple word "No", after which you must make a new offer or drop out of the running.
But understanding the ins and outs of trading isn't enough. You've got to be able to spot the diffusion-treated blue sapphires, glass in-filled rubies, doublets and triplets, and quenched-cracked gray sapphires soaked in red-colored oil and presented as rubies, just to mention a few of the challenges you'll encounter. Once you've mastered the whole intricate operation, a new treatment or con technique appears to keep you on your toes. In the end, you just try to stay ahead - forget about your losses, but remember what you learned from them."
For comments, questions or price quotes E-mail NGC, Attn: R. Genis
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