Q1 2005 UPDATES

JANUARY-FEBRUARY-MARCH

MARKET IN BRIEF from the Guide Jan-Mar 2005

•  January - Sales were mixed during the holidays. This year the top end saw good demand for fine quality gems and demand for unenhanced corundum was strong. Sales of lower- and mid-price-point jewelry lagged behind expectations. Internet-based gem and jewelry companies posted the largest increase in sales this season. Chrysocolla and Chrysoprase are enjoying popularity. Consumer demand is improved, but supplies of high-quality stones in many of the traditional colored stones including ruby, sapphire, tanzanite and emerald are down.

•  February - Extra-fine quality natural pink sapphires and other pinks (spinel, morganite, topaz) fetched strong demand and prices. Blue sapphires continue strong. Untreated blue sapphires had better-than-expected availability. Sales for 8-10mm white South Seas are good, and 12-15mms improving.

•  March - The colored stone market continues to demonstrate a strong demand in a narrow range of products. Fine and extra-fine unenhanced gem materials are selling well. Prices are strong with little resistance from buyers. Sales of gems in the mid-price points now lag sharply. The market for pink and blue sapphires is also very active, with prices firming on demand. Tahitian pearls in 8-9.5mm sizes are in strong demand and prices continue to increase.

UPDATES from Chantaburi Gem Market

•  Fine to extra-fine Rubies and Sapphires, as well as colored stones like Spessartite, Tsavorites, Spinels remain scarce. In contrast, there is a large volume of commercial quality goods circulating.

•  In particular, since mid last year, there has been a flood of clarity enhanced Rubies filled mainly with lead glass, a departure from the normal low RI glass-filled rubies. Dealers are not overly alarmed because most sellers make full disclosure and the asking prices are fair. A check with a dealer reveals that prices can range from 35 baht/ct for small calibrated sizes to 250 baht/ct and more for larger sizes. Furthermore, they say it is not too difficult to spot a lead glass filled Ruby because of the telltale flashes of blue, violet, and orange and sometimes iridescence in the fractures. If those are not visible, closer inspection of inclusions may reveal suspiciously low relief fractures and gas bubbles and voids within the glassy fillings. Flux and flux-like inclusions are also very common in such rubies.

UPDATES from JCK Magazine Jan -Mar 2005

•  Jewelers are bracing for higher jewelry costs this year following the rise in the price of gold - costs they'll have to pass on to customers. The price of gold on the world markets topped $456, a 16-year high and a 13% gain in value, on Dec 2 2004 . Analysts believe that rising retail prices will have little effect on purchases of upscale 18K to 24K jewelry and watches. However, they expect some buyer resistance from the lower end of the market.

•  A German court has ruled the term 'Cultured Diamonds' misleading and has restrained the German distributor of Gemesis Diamonds from using it to describe synthetic diamonds. The ruling ordered the company to use the terms 'synthetic' or 'artificial'. It is currently unclear as to whether there will be an industry-wide consensus on the banning of the term 'cultured diamonds'.

•  A copper-bearing Tourmaline from Mozambique that shows a reverse color-change has been reported. This stone showed a distinct color-change from purple in fluorescent light, to gray-bluish green in incandescent light. It was eye-clean, and even with magnification it was exceptionally free of inclusions except for a tiny crystal near the surface of the pavilion and three miniscule needles near the girdle. There is currently no explanation for the reverse nature of the color-change.

•  GIA accepts GemEwizard after reviewing the beta version. During more than a year of testing and refinement, the colors of GemEwizard were fine-tuned to represent those in GIA's color-description system and to establish standardized lighting and grading procedures that were essential to ensure results. At this point, GIA is only involved in using its customized color-description system in its colored-stones diploma program.

UPDATES from the New York Daily News Jan 2005

•  "What's in? Unusual necklaces and bracelets. Big earrings have been done to death…..What's out? Chandelier earrings. Leave chandeliers on the ceiling where they belong."

UPDATES from Jewellery News Asia Magazine Feb 2005

•  Demand for colored gemstones is expected to continue its strong upward swing in 2005. Gemstones in pastel colors such as pink, purple and green continue to lead sales this year, according to gemstone suppliers interviewed. Fancy colored sapphire, tourmaline, aquamarine, morganite and beryl are among buyers' favorites. Increased demand and a fall in production of colored gemstones have resulted in price increases for some categories, particularly top qualities and big sizes. In addition to ruby and sapphire, tanzanite, rubellite and morganite are reported in short supply, particularly big sizes up to 30 carats. Prices of these gemstones are expected to increase further in 2005.