Gems

Gems have always had a special fascination for mankind. Forthousands of years, gems were worn as charms, or amulets, to protect people form demons and diseases. Some gems were believed to have the power of enabling their owners to foretell the future. Other gems were supposed to be able to tell whether a person was guilty or innocent of a crime.

In ancient times, gems were distinguished only by their colors. The name "ruby" was given to all precious stone of a red hue. All green stones were called "emeralds." And all those of blue were called "sapphires."

Later on it was discovered that some gems were harder than others and endured longer. So it came about that the value of a gem depended not only on its color, brilliancy, and rarity, but also on its hardness. Diamonds for instance, are today considered the most precious of gems because, besides their beauty, they are the hardest of all stones.

All the gems are called "precious stones." But strictly speaking, the word "precious" is used only for the four most valuable stones, the diamond, the ruby, the emerald and the sapphire. The other valuable stones are "semi-precious,"and these include opals, amethysts and topazes. Many of the precious and semi-precious stones are close relations.

The diamond, the most precious gem, is also the simplest. It is composed of one element, pure carbon. Rubies and sapphires are varieties of a substance called "corundum". Rubies have their carmine color because of small quantities of iron in the corundum. And the presence of various oxides make sapphires bright blue or velvet blue.

A great many of the most beautiful gems are made of combinations of a substance called "silicate." Topaz and tourmaline are members of the silicate group. Garnets and jade are also silicates. Some of the less costly gems belong to the quartz group, which is pure silica. A methyst is one of these. The opal is silica containing five to ten per cent of water. The opal, by the way, is one of the few precious stones which are supposed to bring evil to those who possess it. Even today, many people will not wear opals because of this ancient superstition.

Science today is beginning to learn how to manufacture precious stones artificially. This includes diamonds, emeralds, rubies, and sapphires. These are not imitations; they are actually the same as the natural stone, only they are being produced in laboratories!

Designs of necklaces

Gold strikes all time high

India's future contract ending on Dec 5, 2009 on the MCX - Multi Commodity Exchange of India Ltd struck a record high of 16,173 rupees per 10 grams on Monday, following a rise in global gold due to a weaker dollar.

The morning session was not held on Monday owing to a holiday on account of Guru Nanak Jayanti. The previous high of 16,066 was hit on Oct. 23, 2009.

Engagement Rings

Hallmark

Hallmark has been acting as a safeguard to purchasers of gold and gold articles for centuries in various countries. In simple terms, Hallmark is a purity certification of gold articles in accordance with Indian Standard specifications.

Gold articles are evaluated and tested at an official Assaying and Hallmarking Centre and then certified that the metal used conforms to the national and international standard of fineness and purity.

The Bureau of Indian Standards, the country's apex standards body, is involved in the development of technical standards (popularly known as Indian Standards), product quality and management system certifications and consumer affairs in all matters concerning standardisation, certification and quality.

The BIS hallmarking scheme has been aligned with international criteria on hallmarking. As per this scheme, license is granted to the jewellers by BIS under Product Certification Scheme. The BIS certified jewellers can get their jewellery hallmarked from any of the BIS recognized Assaying and Hallmarking Centre.

Hallmark consists of five components i.e. BIS Mark, the fineness number (corresponding to given caratage), Assaying and Hallmarking Centre's mark, jeweller's mark and year of marking denoted by a code letter and decided by BIS (e.g. code letter 'A' was approved by BIS for year 2000, 'B' being used for the year 2001 and 'C' for 2002). The marking is done either using punches or laser marking machine.

The BIS hallmark, a mark of conformity widely accepted by the consumer, bestows the additional confidence to the consumer on the purity of gold jewellery.

As per this scheme the jewellery retailer / manufacturer desirous of obtaining a license apply to BIS for use of Standard Mark (hallmark) on their jewellery. After registration, BIS officials conduct a preliminary inspection for verification of premises retailing / manufacturing, testing facilities and competence of testing personnel. A sample is drawn from the jewellers retail / manufacturing premises for independent testing. Based on the satisfactory preliminary inspection report and test report of the sample drawn during inspection, Licenses granted to the jeweller.

After getting the license, the jeweller (retailer / manufacturer) has to follow a BIS approved scheme of testing and inspection on a continuing basis to have confidence in the homogeneity and purity of the gold jewellery offered for hallmarking.

A BIS certified jewellers (retailer / manufacturers) has right to register himself with any of the BIS recognized Assaying and Hallmarking Centers to get his jewellery hallmarked. BIS maintains surveillance on the certified jewellers, at a defined periodicity. Market surveillance involves collection of hallmarked gold jewellery from licensee's retail outlet/manufacturing premises and having it tested for conformity in BIS recognized Hallmarking Centre.

Deviations in degree of purity of fine metal and observance of operations not in conformance to the system may result in cancellation of BIS licence, and invoke legal proceedings for penalties under the BIS Act, Rules and Regulations.

The principal objective of assaying and hallmarking is to protect a consumer against victimization of irregular gold quality. Besides consumer satisfaction, hallmarking helps to create an export competitiveness of gold jewellery industry thus provide strong impetus for gold jewellery exports.

In addition, it develops gold based financial products that will help in mopping up the vast dormant gold resources lying with the household sector. It also helps develop India as a leading gold market centre in the world commensurate with its status as the topmost consumer.

The jewelers with BIS license of Hallmark Gold Jewellery provide clear indication of their capabilities, strong evidence of their commitment to quality, assurance of consistence in purity and quality of gold jewellery.

It provides opportunity is to describe the way they maintain their standards for quality control and later demonstrate that they consistently do what they claim. It provides international competitiveness and enhanced customer satisfaction. It also provides third-party assurance and satisfaction that they have got the right purity of gold for the given price and protection against victimization of irregular gold quality / purity.

Dubai jewellery group Damas International Ltd and India's Gitanjali Gems Ltd plan to open up to 60 stores by 2014 to tap into rising jewel demand in India.

Nasdaq Dubai-listed Damas said in a regulatory filing it won approval to set up a joint venture with diamond and jewellery maker Gitanjali to trade jewelleries and related accessories. The partnership will see Damas opening 50 to 60 retail outlets over the next three to five years.

India is really a potential market, where the gems and jewellery market growth is 25 to 30 percent a year.The companies will jointly invest up to 3.5 billion Indian rupees ($72.72 million), the minimum requirement by the Indian government. The establishment of the company, in which Damas will hold a 51 percent stake, will be finalised soon. India's gem and jewellery industry has sought additional dollar financing from the country's foreign exchange reserves to inject liquidity into the sector in June.

DAMAS RETAIL EXPANSION: Dubai has in recent years joined the club of major gold trading centres such as London, New York and Hong Kong, thanks to proximity to the world's biggest gold consumer, India, and an aggressive drive to become a regional commodities hub.

Family-controlled Damas - the first retail company to list on the Nasdaq Dubai in July -- operates in about 18 countries.

Dubai has the highest concentration of jewellery shops in the world, generating trade worth $35 billion in 2007 -- 20 percent of the $173 billion total global jewellery trade.

Sales volumes at Damas fell 11 percent in the first quarter, compared to the same period last year.The drop in sales was attributed to a fall in consumer spending on gold, due to high prices in the period. Despite Damas' sales drop, its performance was better than the overall Dubai market, which saw a sharp decline of 40 to 60 percent in gold sales in the first quarter, versus volumes between October through December.

Platinum - Investment doubles

Net physical demand for platinum investment products more than doubled in 2008, rising by 250% from 170,000 ounces in 2007 to 425,000 ounces.

The really significant swing came in Japan; in 2007 Japanese investors resold 60,000 ounces of large platinum bars and investors remained net sellers in the early part of 2008, but there followed a palpable change in sentiment as yen prices fell sharply and equity market values were unraveling. The final quarter was especially strong, leading to overall net purchases for the year of 275,000 ounces of platinum.

European investment was down from 195,000 ounces to 105,000 ounces, while North American investment activity is reported to have increased by 33% from 30,000 ounces to 40,000 ounces as North American investors cleared the US Mint of its stocks of Platinum Eagles despite volatile prices.

Chinese demand for investment products is recorded as zero (the preference being for jewellery products while investment products are gold).

The 6% contraction in jewellery demand was driven by the Japanese market. Japanese jewellery demand is recorded for 2007 at 540,000 ounces gross, but 180,000 ounces net as a result of 360,000 ounces of recycling. In 2008, recycling jumped to 480,000 ounces and although gross purchases are recorded at just 5,000 ounces fewer than in 2007 at 535,000 ounces the impact on net demand was clearly substantial, taking it down by 125,000 ounces to just 55,000 ounces. Japan was the only region that reported increased scrap return. Much of this was concentrated in the first part of the year, and towards year-end those retailers who reduced prices saw a sharp rebound in demand with consumer purchases recovering towards 2007 levels.

Chinese scrap fell from 290,000 to 210,000 ounces over the year, so that Chinese net purchases for jewellery increased by 100,000 ounces in 2008 to 850,000 ounces or 62% of global net jewellery demand. High prices in the first half of the year saw manufacturers and retailers reduce their stocks and in the first half of the year, gross purchases were below 2007 levels while scrap return was high. The second half of the year saw the position reverse with secondary flows diminishing sharply and manufactures increased their purchases from August onwards.

Overall gross European demand remained constant at 200,000 ounces in each year, but high and volatile prices in the first half of the year impinged on jewellery sales and UK demand declined, while Switzerland became the largest European market with production of platinum watches in that country increasing by almost 14%.

Demand of Gold in India

India's gold demand slowed to a drop on Monday, after having picked up the preceding week when well-stocked traders braced for a marriage season, which lasts till June end.

An appreciating rupee makes the dollar-quoted gold cheaper. The Indian rupee rose to its strongest in three months in mid-morning trade, buoyed by wide losses in the dollar overseas, though it weakened later.

Gold traders have been stocking the yellow metal after better-than-expected Akshaya Tritiya sales on hopes of a good wedding season.

Foreign gold, which guides the domestic market, was steady as a sharper appetite for riskier assets such as equities dented interest in the metal as a safe haven, but a decline in dollar limited losses.

Copper, Nickel Rose

London copper futures rose on Tuesday on positive purchasing data from China and signs of recovery in U.S. housing, catching up after a three-day weekend to gains made in Shanghai.

But Shanghai gave up its early advances on worries prices have risen too fast.

Copper for delivery in three months on the London Metal Exchange MCU3 rose. Turnover was brisk.

There is a massive amount of selling in Shanghai related to arbitrage and it's dragging down LME. Focus is very much on the physical market -- there was a big rise in prices yesterday which may have reversed today.

Overnight data underpinned the market. Pending sales of previously owned U.S. homes rose for a second straight month in March, while construction spending edged higher, suggesting moderation in the long housing slump.

That fed into the positive sentiment generated by a survey of Chinese manufacturing that provided fresh evidence that massive fiscal and monetary stimulus is reviving the world's third-largest economy. Traders said Shanghai's direction for the rest of week would be dictated by London.

Nickel MNI3 rose 2.5 percent to $12,200, having touched $12,320 earlier. The market has been battered by a collapse in stainless demand, but the world's biggest stainless steel producer, Acerinox said on Monday it saw the market recovering in the third quarter after poor sales and weak prices pushed the Spanish firm into a first quarter loss.

The stability of nickel in recent months together with the very low level of stocks in all markets gives us confidence in a recovery of the market in the third quarter.

Diamond - slash in price

The $65 billion global diamond market is reeling. The price of polished gems dropped by an average of 31 percent since an August peak as the worst recession since World War II deterred buyers of luxury items like necklaces and earrings, according to diamond data company www.PolishedPrices.com. Antwerp, the world’s biggest gem trading hub, has seen exports drop as much as a third. De Beers, the largest diamond producer, slashed output by 91 percent.

People are not buying earrings, bracelets, things they can do without if they want to tighten their belts, they are still buying rings for weddings, engagement.

Wholesale diamond prices have dropped about 20 percent to 25 percent from their highs around June last year.

At the cheapest end of the market, Internet retailer Amazon.com Inc. is selling a platinum ring with a 0.5-carat diamond for $1,675, down from a list price of $3,425. The gem’s clarity is SI1 or SI2, meaning there are slight defects that normally can’t be seen by the naked eye.

Gold

Gold has had an inestimable effect on human history. It has been crafted, mined, worshipped, plundered, fought over and traded for thousands of years. Today, the search for gold is as eager as ever, despite the vast stocks stored away in underground bunkers. So why has gold held this fascination for humanity?

Its initial attraction is its color, an eye-catching and characteristic bright yellow with a soft metallic glint. Gold’s pleasant ‘feel’, a combination of its density (19.3 grams per cubic centimetre when pure) and coldness, cannot be duplicated by any other metal. Furthermore, gold can be hammered into very thin sheets or leaves, drawn into wire, cast, carved, polished, heated without tarnishing and easily combined (alloyed) with other metals.

Gold also conducts heat and electricity, reflects light and is untouched by nearly all acids, a property which led alchemists to christen it the noble metal. This combination of properties makes gold very stable in its natural metallic form, and also gives it many uses in electronics, ornaments, jewelry and advanced technology.

The color of gold is directly related to its purity. Crystallised gold and silver have the same atomic structure and their atoms are nearly identical in size, so that natural alloys of gold and silver are common.

Pure, or 24-carat gold, is the brightest yellow, but as the amount of silver increases the color becomes paler. Pale gold containing more than 20 per cent silver (corresponding to about 20-carat gold or less) has been called electrum. Trace amounts of copper, iron and palladium can also substitute in gold. Man-made alloys of gold with rhodium, iridium or palladium, intended to give gold greater hardness when used in jewelry, have been given names such as ‘white gold’. The carat scale is commonly used in jewelry, while in mining, an alternative scale uses ‘fineness’ of gold, where a figure of 1000 corresponds to pure or 24-carat gold.

Base Metals surged

Base metals rose on Wednesday boosted by positive sentiments from the equity markets and falling inventories on the London Metal Exchange.

Prices were up locally on MCX though the gains were capped due to strengthening of rupee against the dollar. On Wednesday rupee appreciated by 44 paise against dollar to close at 50.8.

Outlook remains bullish but investors should enter at low levels for investment purpose.

On LME at 5.30 pm local time, copper was 3% up at $4,286 per tonne, aluminium was 1.3% up at $1,418 per tonne, lead was 1.9% up at $1,312 and zinc was almost 3% up at $1,380 per tonne. Locally on MCX at 5.40 pm, copper June was up by 2.5% at Rs 220 per kg, aluminium May contract was 0.7% up at Rs 72.15 per kg, Lead was 1.6% up at Rs 66.6 per kg, nickel was 2.1% up at Rs 561.7 per kg and zinc was up by 2.8% at Rs 69 per kg.

On LME, inventories have registered some fall with copper stocks fallen by 8,825 tonnes to a three-month low of 411,450 tonnes, adding to a fall of 5,000 tonnes on Tuesday. There had also been demand from China to profit from the widening price gap between the London and Shanghai markets.

Stocks markets across Asia gained on Wednesday on easing concerns about the Swine flu outbreak.

The consumer confidence for April was highest in more than three years and the decline in US house prices slowed in February. Metals were also supported by the weakness in dollar against the euro. Both the yen and dollar dropped for a second day against the euro after European economic confidence increased in April for the first time in 11 months.

China - Gold Holding

Chinese gold reserves are now stated as being some 33.89 million ounces - or just over 1,000 tonnes, making it the world's sixth largest holder of gold after the US, Germany, the IMF, France and Italy - excluding, though, the 1,100 tonnes held in the SPDR Gold Trust ETF.

Firstly, it is pointed out that the purchases over the past six years had been made by the Chinese State Administration of Foreign Exchange (SAFE) rather than by the Peoples Bank of China (PBOC), which is why the amount of gold had not appeared in China's official reserve figures. Now though, the holding has been transferred to the PBOC and hence the announcement. The gold has been added to the monetary reserves held by the Central Bank.

While this may not be the proverbial opening of the floodgates, it does suggest that the PBOC, and other Central Banks may become net purchasers of gold in the years ahead, rather than net sellers as has been the case of late.

Jewellery exports

India's export of gems and jewellery will regain the shine within next 6 months.

Mehul Choksi, managing director of Gitanjali Gems, is of the opinion that earlier there was huge inventory and it is over now and the situation is improving.

Due to order cancellation and late payment from markets, the sector witnessed a decline of 18.8% in exports in second half of previous fiscal. The exports declined 30-35% during Feb-Mar 2009 compared to same period of previous year. The decline was 50% during Dec, 2008 - Jan 2009 compared to same period last year.

The export market comprises of cut and polished diamonds and coloured gems.

Silver: demand and supply

The historic price ratio of silver to gold shows that about 10 ounces of silver would buy one ounce of gold. Recently, the ratio is about a 70:1 ratio (with silver at $13/oz., and gold at $1000/oz.) As the silver to gold ratio returns to historic values, from 70:1 to 10:1, you may make over 7 times more money investing in silver, than gold!

Silver prices may rise to exceed the 10:1 ratio, for the following reasons:

More than all of the silver produced by the mines each year is consumed by industry, which leaves little to no room for substantial investment demand. Investment demand for silver is a tiny $1 billion per year. A small increase in investment demand will drive prices sky high.

Most silver is produced as a by-product of mining gold, copper, zinc, or lead. Higher silver prices might not substantially increase the amount of silver mined each year. Consider, in 1980, when silver prices went up to $50/oz., less silver was mined than in 1979!

Higher silver prices may not cause much reduced demand. Why? Because most silver consumed by industry is used in tiny quantities in each application, such as in film or electrical contacts, therefore, rising silver prices will not easily slow down growing industrial demand.

Zambia discovered more copper

Zambia, already Africa's top copper producer, has found more deposits in its north and will invite foreign companies to conduct further feasibility studies prior to mining, a minister said on Wednesday.

More copper and manganese had been discovered in Luapula province, which borders the Democratic Republic of Congo (DRC), and the government had already issued some licenses for the mining of manganese.

The Japanese International Corporation Agency (Jica) had financed geological mapping of areas with copper and the process had been extended to the nearby Northern Province. The government is trying to impress as many mining companies (as possible) to invest in Luapula province. We have huge resources and the prospects of mining are very bright.

Zambia planned to geologically map 45% of the country where there was mineral wealth in order to invite more investors into mining. The potential (for more discoveries) of minerals is very high.

Copper mining is the economic lifeblood of this southern African country of 12 million people, where authorities say copper production will rise to more than 600,000t this year from 569,887t in 2008

Gold marching towards 13000

Gold is moving slowly to the point from where it had picked up and made life time high.

The reasons were global stock markets were passing thro' worst period and investors started investing in gold, which is a safe investment right since ancient times. From around 45 INR per dollar went to 51 INR per dollar. Investors preferred gold for investment and thus buying interest was increased and the supply remained the same. Price shoot up.

But now, stock markets have shown some improvement and sentiment is very strong now. Rupee is again trading at 49 - 50 per dollar. And the G-20 countries have decided to allow IFM (International Monetory Fund) to sell 403 tonnes of gold reserves in the open market to raise funds for its global projects.

At higher prices, individuals started selling their ornaments in anticipation that prices will go down and at that time they can replace the same quantity in less amount. In Feb 2009 and Mar 2009, there was no imports of gold to India.

All these indicate that gold will go down to Rs. 13000 per 10 gms.

Gold

Gold is one of the chemical elements. Gold's chemical symbol is Au and its atomic number is 79. Gold does not interact with other chemicals or compounds. Gold doesn't tarnish and even the strongest acids have no effect. Thus, gold lasts forever - and stays shiny the whole time!

Gold has many industrial uses, but its main historical uses have been for jewelery and money - both are a store of value. Gold has been used as a store of value for at least 5000 years. Gold is measured and prices are quoted in Troy Ounces and Grams. As an example of gold's ability to store value, 2000 years ago one ounce of gold would buy a fine man's outfit. Today one ounce of gold will still buy a good quality man's wool suit with enough left over to buy a few shirts, a tie, some underwear, socks, a pair of shoes and a belt!

Gold has the remarkable ability to store value in both deflationary and inflationary times.Gold is a store of value virtually independent of economic conditions. Unlike shares of a company or government bonds - gold will always retain value. Gold's most important use is insurance against the paper currency of the country you live in. Almost every country has had at least one major "currency crisis" over the last one hundred years. Those that had some of their wealth in gold survived. Unfortunately many people saw their saving become worthless - sometimes in a matter of days.

It is better to buy gold in small amounts regularly, every month for example, over a period of time.The percentage of your total wealth devoted to gold is a personal decision and depends on your particular situation. A conservative goal would be ten percent. In times of uncertainty the percentage should be much higher. Gold is recognized and valued everywhere in the world. It is easier to sell gold than to buy gold! Of course gold can be used in barter or trade as it has for thousands of years.