Diamonds Update

Mickey Mouse Rules of Diamond Shopping

Anne brought home this cute figurine this weekend and we commented how much Mickey and Minnie reflect the emotions that occur when diamond shopping.  I thought this was a good opportunity to mention some of the diamond shopping rules that are illustrated by Mickey and Minnie.

1) Get input from the one who is going to be wearing the diamond ring.  Shopping together like Mickey and Minnie is a good way to communicate.  The most important piece of information is what shape she wants.  If a girl thinks she might have a proposal in her future, she should do some shopping and determine what shape she likes best on her finger.  A subtle comment when shopping can tell the guy what shape and save him a lot of worry and a possible expensive mistake.

2) If the guy is trying to keep the purchase a surprise, they might not know what type of mounting their girlfriend wants.  The reality is that she probably does not know yet.  Buying a mounting that she does not like or is not comfortable on her finger, can be a very expensive mistake so a good strategy when in doubt is to put the diamond in a simple mounting, propose, and let her help shop for the mounting.

3) A word of caution to guys and gals when shopping.  Guys, be careful and understand that just because a girl says something looks nice, does not mean she wants that on her finger.  Girls like to shop and often provide a commentary on their “sport.”  Not every comment about a ring or diamond should be taken as their ultimate decision.  Girls, be careful and understand that your boyfriend is looking for every clue he can get and will take you comments as fact.  If you say you really do not need a big diamond, he just might take you at your word.

4) While the beads of sweat on Mickey’s brow might be from apprehension of having to buy a diamond, the usual worry we see in shoppers is the fear of making a mistake.  The solution is to do some homework and learn about diamonds and ring.  Diamond source of Virginia has excellent education information and shopping advice on their website.  You do not have become a gemologist but you should learn the basics.

5) There is something between Mickey and Minnie that you should be wary of and that is the SALE sign.  Just because a jewelry store has a sale or the price shows a big discount, does not mean the item is a good value.  If you start with inflated prices, the amount of discount is meaningless.  Research online retailers to find out what the prices should be and do not pay more than you need to for a beautiful diamond.  This advice is especially pertinent if you are shopping out of town while on vacation, on a cruise, or at some “gem show.”  Impulse buying is the way shops get tourists to buy something without doing the research they normally would and then are stuck with their purchase when they go home.

6) While there is no way to know what documentation goes with the diamond ring Minnie is pointing to, it is unlikely they will find a GIA graded diamond in a jewelry store.  Do not confuse GIA grading, which means it has a Diamond Grading Report from the GIA Laboratory, with someone in the store having taken some classes at the GIA and writing an appraisal or giving an opinion on the quality.  Not all grading laboratories are as accurate as the GIA so if a retailer is trying to sell you EGL, IGI, or some other documented diamond, learn about the Certification Game they play.

7) When I see Mickey holding shopping bags, it reminds me that buying an engagement ring often comes at one of the most financially difficult times for a couple.  Often the couple is still paying off school loans, has been working but not that many years, and they have to start planning for a wedding and honeymoon as soon as they engaged.  Good financial planning and decision making means knowing your budget and seeking the best values possible.  The lowest price might not always be the best value, sometimes the cheap price is due to cheap quality.

8) Mickey and Minnie ended up in the office of Diamond Source of Virginia and if you are reading this article, you might be lucky to do the same.  If you have any questions, give us a call at 888-477-8385 and we will be happy to assist you.  We help clients all over the country every day, many of them who have already purchase somewhere else or are just starting shopping.  Since we do not own inventory and search for the best diamonds in the country for our clients, we can tell you the truth and give you unbiased advice.  Discover the better way to buy diamonds.

Improved Process for Synthetic Diamond Production

Synthetic diamonds catch the public’s attention because they immediately think of the man-made diamonds replacing diamonds in the jewelry industry.  However, the motivation behind researchers usually has more to do with industrial applications.  Diamond’s hardness, high thermal conductivity, high electrical resistivity, optical transparency, resistance to chemicals, and other unique properties make it a valuable material for a variety of uses including surgical scalpel blades, equipment “windows” exposed to harsh environments, heat-spreaders for electronic devices, temperature and pressure sensors, and drill bits used in mining and oil exploration.

Scientists at the Carnegie Institution‘s Geophysical Laboratory recently announced an enhanced process for growing diamond crystals using the chemical vapor disposition (CVD).  Most synthetic diamond methods require high temperature and extremely high pressure to mimic nature’s own diamond growing process.  However, the CVD process uses high temperature but low pressure to produce single-crystal diamonds rapidly and with more controlled results.

The Carnegie researchers add a new twist to the synthetic diamond process by heating the diamonds at temperatures up to 2000 degrees Celsius but low (less than atmospheric) pressure to alter the color of the diamond.  The raw synthetic diamond crystals are usually yellow-brown in color but this special annealing process transforms the color to a colorless or light pink hue.  With the ability to use low pressure, researchers have been able to identify the specific crystal defects that cause color changes in diamonds.

This annealing process uses microwave plasma to produce the high heat at low pressure, yet keeping the diamond from changing to graphite.  Producing colorless diamonds has been a challenge for synthetic diamond manufacturers and getting a faint pink color could end up being a bonus.  This ability to produce colorless diamond crystals has value not only in the jewelry industry but also in many of the industrial applications where colorless transparency has increased value.

Global Economic Slowdown Impacts Diamond Industry

Diamond prices, like most commodity and luxury items had been climbing for years.  Large diamond prices in particular have been sky rocketing the past five years due to the imbalance of supply and demand.  This year alone, diamond prices were up about 16 percent.  However, the global forecasts and now the reality of economic slowdown, are taking their toll on the demand for diamonds.

After seeing the prices of large diamonds begin to fall, the world’s largest producers of diamonds (De Beers and Russia’s ZAO ALROSA) have announced they will cut supplies of rough gems to support prices.

The sight-holders who purchase diamonds from De Beers have requested the supply of diamonds be reduced at the final two “sights” scheduled in November and December.  ALROSA has said they will reduce rough diamond supplies as much as 30 percent.

The reduction of rough diamond supply is an effort to keep the price of diamonds steady and thus encourage continued exploration and mining efforts.  A sudden, short-term drop in diamond prices would play havoc with the capital-intensive diamond mining industry, causing some business to stop exploration and mining efforts.  Then when the economy recovers and the demand for diamonds gets back on its fast track, the supply side would lag the demand side of the industry and cause sharp price increases.  De Beers and ALROSA are acting as a moderating agent for diamond prices.

The plummeting stock market and severe credit crisis have caused the confidence of luxury buyers in the United States to drop to its lowest level in four years.  Stock prices of luxury retailers like Tiffany & Co have dropped as much as 40 percent this year in anticipation of reduced diamond sales.

Consumers will continue to purchase diamonds as engagements, anniversaries and special occasions continue in good and bad economic times.  However, even the wealthy shoppers are being more discriminate about their purchases and shopping for values.

$5 Million Victoria’s Secret Diamond Bra

Victoria’s Secret knows how to get attention and their 2008 Black Diamond Fantasy Miracle Bra is no exception.  The one-of-a-kind contains about 3,900 gemstones with 1,500 total carat weight and was created by Martin Katz, the rare gemstone jeweler who has worked with Victoria’s Secret on earlier fantasy lingerie.

The bra has 3,575 black diamonds, 117 certified one-carat white round diamonds and 34 rubies.  Two tear-shaped black diamonds with 100 total carat weight, drop from diamond encrusted cords in from.

Brazilian Adriana Lima is the supermodel who will be modeling the this 2008 Fantasy Bra in the Victoria’s Secret Christmas catalog as well as the December 3 televised fashion show.

Learn more about black diamonds...

Learn to Play the Certification Game

It is hard to play the game if you do not know the rules and that is what most jewelry stores are counting on when they sell diamonds with EGL, IGI, HRD, or other “off brand” grading reports.  What is this game being played every day in jewelry stores across the country?

Within the industry, it is common knowledge that EGL, IGI, HRD and other laboratories are more generous in their grading than the GIA.  Unless a diamond shopper does extensive research, they probably have no clue that there are significant differences in grading accuracy between the diamond grading laboratories and you can be sure that the local jeweler is not telling them.  The shopper thinks that just because the official looking document says a diamond is H color, it must really be H color.  Wrong!

It is our experience that EGL-USA graded diamonds tend to be off one color grade compared to GIA grading and EGL-Israel grading is often off two color grades compared to GIA grading.  Other grading aspects like clarity, polish, symmetry and fluorescence can vary too but it is the color that impacts the value of the diamond and it is a factor that is hard for the consumer to see.

The basic fact is that the type of grading report should not affect the price of the diamond.  After all, the fees charged for grading only differ a few dollars between the laboratories.  Why then do wholesale prices vary greatly for diamonds with the same grading but different laboratories?  It is because the grading is not the same. 

How different can the grading be?  Look at the real life example we discovered recently.  Compare the two diamonds with the same weight below and tell me, which one do you think is more valuable?

Pear, 2.73 carat, EGL cert, D color, VS1 clarity, depth 66.1%, table 59%, measurements 11.92 x 7.38 x 4.88 mm, VG polish, VG symmetry, No fluorescence

Pear, 2.73 carat, GIA cert, F color, VS2 clarity, depth 66.0%, table 59%, measurements 11.92 x 7.41 x 4.89 mm, VG polish, G symmetry, No fluorescence

At first glance, it is obvious that the top diamond with two color grades higher and one clarity grade higher must be the more valuable diamond.  This is part right and part wrong.  The top diamond was priced more than $4000 higher on the wholesale market.  However, closer examination of the specifications plus the fact that both diamonds are owned by the same wholesaler, reveals that these are the same diamond.  As is often the case with larger diamonds, the diamond is sent to the GIA first to see what grading it will get.  Then it is sent to the EGL in the hopes of getting a higher call on the grading.  How can the same diamond have different values?  The answer is that prices are based on “perceived” value and the higher grades on the report imply greater value. 

Sometimes the shopper has to share some of the blame.  Some shoppers want a “deal” so bad, they throw logic out the door.  For example, may shoppers know an EGL graded diamond will be less expensive than a GIA graded diamond and suspect they are not the same quality, but want the “deal” and will overpay to get the higher letters on the grading report even though they suspect the diamond is not that quality.  For example, if the same diamond is color graded G by the EGL and color graded I by the GIA, the consumer can probably purchase the GIA I color for less than the EGL G color price.  However, jewelers are counting on shoppers wanting the “deal” and paying more for the EGL G because they want to believe they are getting more for less.

A local client recently purchase her 1.5 carat round I color, SI1 clarity diamond at a local jewelry store because their price was about the same as our price and they had been buying from that store for many years.  However, she purchased an EGL graded diamond instead of the GIA graded recommendations we provided.  While the price might have been about the same, the value was certainly different.

Here is a diamond we recommended:
RD, 1.53 carat, GIA cert, I color, SI1 clarity, price $9323, depth 61.5%, table 58%, measurements 7.35 x 7.42 x 4.54 mm, VG VG N
[Excellent GIA cut grade, Excellent HCA rating (1.2)]

Here is an EGL diamond with almost the same specifications and our price:
RD, 1.53 carat, EGL cert, I color, SI1 clarity, price $7763, depth 62.5%, table 59%, measurements 7.31 x 7.35 x 4.60 mm, EX EX N

This $1560 price difference means that the shopper actually paid much more than they needed to.  Since the EGL diamond is priced less than a GIA J color, you can expect it to be less than a J color.

Are all EGL graded diamonds off compared to GIA grading?  Not all of them but the ones your jeweler is showing you probably are.  If the prices are different than the GIA graded diamonds, you can expect the color grading is different. 

What about AGS graded diamonds?  We had an AGS I color diamond that was damaged so had it recut and sent it to the GIA for grading, where it came back with a J color grade.  Then consider that many AGS graded diamonds are priced on the wholesale market at about one color grade lower than similar GIA graded diamonds.  If the AGS graded diamonds are priced less than similar GIA diamonds, you should assume they are lower in color than their grading report indicates.

If diamonds with certifications are off this much in grading, you can only imagine what the uncertified diamonds are like that are being sold every day, especially when they are already set in a mounting.

Okay, now that you know more about the game that is being played, what are you and other shoppers going to do?  I would suggest you take the same strategy that we recommend to our clients.  Since the GIA is the most accurate in grading, stick with GIA graded diamonds when you are purchasing.  The price of the GIA graded diamond is going to reflect the quality you are buying, why take a chance with the other grading laboratories that can be off 1 to 3 color grades and maybe a clarity grade or two.  Consumers just do not have the tools or the training to accurately grade the stones themselves so it makes the most sense to rely on the most accurate grading laboratory for important diamond decision making.

RELATED ARTICLES

http://grading.pricescope.com/

http://www.diamondsourceva.com/Education/Certification/egl-certification.asp

Nine Year Old Finds Diamond in Arkansas

Matthew Smith of Dallas, Texas is one of the latest to discover a diamond at Crater of Diamonds State Park in Arkansas.  Along with his cousins from Connecticut, visited the park last week and found a 2.75-carat brown diamond.  He named the diamond the Brown-Eyed Beauty.

Visitors at the park get to keep the diamonds they find at the 37.5 acre plowed field, the worlds only diamond producing mine open to the public.  While visitors at the park find diamonds almost every day of the year, the 2.75-carat find is rare.

Perhaps the top authority on Crater of Diamonds is Glenn Worthington who found his first diamonds at the park in the summer of 1978.  Glenn has been fascinated by the park every since and has written several books explaining the history of the park and the discoveries there.  He just released a new DVD entitled “How to Find Genuine Diamonds in Arkansas,” which is available on his website at www.DiamondsInAR.com.

Glenn emailed me this note this weekend that puts this 2.75-carat diamond find in perspective.

Hi Denny,

Here is some news.  A week ago, on July 12th, a nine-year-old boy arrived at the Crater with his family.  Seven minutes later, he picked up a shiny rock and showed it to his mother.  "Is this a diamond?" he asked.  "No," she replied because it was really too big and they'd only been there a few minutes.  They held onto the shiny pebble for three hours and had it setting on a bucket with other rocks at the wash pavilion.  Finally, the young boy's aunt said, "You ought to take that to the Diamond Discover Center and have it checked to see if it is a diamond."  He did, and it was.  It was a brown diamond that weighed 2.75 carats, and they'd just left it laying around for 3 hours while they searched for diamonds.  Funny but true.  A nine-year-old boy did better in seven minutes at the Crater than I have done in 30 years of searching.  That is the amazing thing about that place.  You never know when or where a big diamond will turn up or who will find it.

Hope all is well with you,
Glenn

July Rough Diamond Prices up 5%

De Beers Diamond Trading Company (DTC) has increased the average prices of rough diamonds more than 5% at its sixth sight distribution July 7-11.  While the average was over 5%, the price of higher quality rough diamonds over one carat increased as much as 15 percent.

The next sightholder rough diamond distribution, scheduled for the week of August 18, will likely have further price increases.

The prices of polished diamonds tend to track closely with the rough diamonds because the cutters and wholesaler have to pass on the increased cost of new diamonds.  It is only a matter of days or weeks before the retail market reflects these increased diamond prices in polished diamonds and diamond jewelry.

Expected Diamond Price Increases

De Beers has scheduled sightholder meetings in July and August, which is where they sell the rough diamonds to cutters.  Industry expectations are that there will be significant price increases for rough diamonds and that the expected increases will probably take place in August rather than July.  Traditionally De Beers announces in advance what the range of increases will be but that information has not been released, resulting in anticipation of double digit increases in for some groups of diamonds.

Price increase announcements for rough diamonds are usually scheduled ahead of the three major industry trade shows (Basel in March, JCK Las Vegas in June, Hong Kong in September).  Price increases tend to be the greatest for larger diamonds since those are the items with the biggest differential between supply and demand.  The last major price increase was in May with average prices increasing about 8% but some four-carat and above diamonds increasing over 20% in one day.  Production of small diamonds tends to be more in line with demand so they have seen relatively small price increases.

The price increases for polished diamonds tend to follow close behind the rough diamond price increases so the likely timeframe is August or September.  If you are planning a large diamond purchase in the next few months, I would suggest taking action sooner rather than later.  We do not know when the retail price increases will occur, for what types of diamonds, or how much the price increases will be, but all the signs are that they will go up near the end of summer.  It would be a shame for a consumer to pay 5-10% more just because they waited a few weeks too long to make their purchase, especially if they have been made aware of the impending price increase.

Hearts On Fire Lawsuit Against Blue Nile

Hearts On Fire, the Boston based diamond jewelry company, filed a lawsuit against Blue Nile asserting that the Seattle based online retailer infringes the Hearts On Fire® trademark.  Blue Nile is accused of using “Hearts On Fire” as a search term in its pay-for-click and sponsored link advertising on search engines.  Moreover, Blue Nile is alleged to also use the “Hearts On Fire” phrase in the text of those links implying it sells Hearts On Fire® diamonds.

One of many companies in the 1990s who created brands based on the Hearts and Arrows patterns, Glenn Rothman renamed his company after his trademarked “Hearts On Fire” brand.  Within the diamond industry, Glenn is known for his marketing success as he has promoted the Hearts On Fire® name to be one of the top brand names.

Jewelers are desperate for ways to differentiate their diamonds from the price competition of online retailers and the Hearts On Fire brand has benefited.  The power of Rothman’s marketing skill is evident in that consumers are willing to pay more than double for the brand.  Ironically, the Hearts and Arrows pattern not a requirement for brilliance and sparkle, but is more of a by-product.

The Hearts and Arrows pattern is a result of diamond cut with great optical symmetry when viewed under a Hearts and Arrows scope.  Many of the exceptionally cut round diamonds display the Hearts and Arrows pattern so there is nothing unique about the brands, other than the marketing.  In fact, cubic zirconia can be cut to display the Hearts and Arrows pattern so there is nothing intrinsically valuable about the pattern other than the consumer perceptions from the marketing.

Clients of Diamond Source of Virginia are happy to find the majority of round diamonds sold by the company display the Hearts and Arrows pattern.  This is a result of only recommending round diamonds with at least Very Good GIA grades, Excellent Holloway Cut Adviser ratings, and at least Very Good proportional symmetry.  What makes Diamond Source of Virginia client even happier is that they do not have to pay extra for the Hearts and Arrows pattern.  They can get exceptional beauty for less than half the price of the brand name diamonds.

No doubt, the Hearts On Fire lawsuit against Blue Nile will generate considerable publicity for both companies.  Only time will tell how much diamond buyers will hear and learn about Hearts and Arrows patterns and if the increased awareness of generic Hearts and Arrows alternatives will lead to greater sales for Blue Nile and Diamond Source of Virginia.

Leo Ingwer Jewelry Designer

Online jewelry catalogs are a great place to get ring ideas when shopping for your engagement ring.  This is especially true if you have limited styles to view in local jewelry stores or just do not have the time to drive from store to store.

One of our favorite diamond ring and jewelry manufacturers, Leo Ingwer Inc., has an extensive selection of diamond engagement rings, anniversary rings, wedding bands, pendants, and necklaces displayed online.  Leo Ingwer is known for its workmanship, excellent quality and exceptional value.
 
While Leo Ingwer is a wholesale manufacturer and does not sell to the public, Diamond Source of Virginia can get you price quotes on item you see in online catalog.

Ladies Platinum Mountings
Ladies Engagement Rings
Ladies Remounts (ring except for center diamond)
Three Stone Rings
Diamond Wedding Rings
Antique Reproductions
Wedding Bands and Sets

You can also check out photos of some of the beautiful Leo Ingwer rings that clients have recently ordered from Diamond Source of Virginia.