Gem Market Pulse July 2017

Production of Colored Gems High, while Demand is Steady

FEATURED GEM: GRAY SPINEL

The big news that hit the press just recently was the upcoming buyout of Gemfields by majority shareholder Pallinghurst. This was a wild story to follow and the outcome has potentially great influence on our gem industry. In May, Pallinghurst, which was the largest shareholder in Gemfields, made a bid to buy the company. A few weeks later, Fosun Gold made a significantly higher bid for the company. Despite Gemfields’ assertion that the Pallinghurst bid greatly undervalues the company, they received more than 75% voting approval and now will be taking over the company. There is uncertainty about the future direction of Gemfields for now.

In the meantime, the industry has been feeling the impact of high production, in part due to the Gemfields large scale mining projects. We have seen a decline overall in ruby and sapphire prices, other than the rare, unheated extra fine gems from important sources. The Mozambique production has produced a great quantity and high-quality rubies, often rivaling those from Burma. Gemfields also has large scale production of emeralds from Zambia. While the emerald market has been rising as of late, there is a good chance that this production by Gemfields might also have some negative price impact down the road.

As reported in the GemGuide July issue, green gems have been trending so far this year. Dealers report demand for diopside, peridot, tsavorite, emerald, and green sapphire. Although pricing for most of these gems has not moved much, some peridot shortages drove up prices in a few categories and after a run up in price on tsavorte in recent years, a slight easing of price has been seen.

Diamond prices continue to struggle with reported slight decreases at the wholesale polished level while rough prices remain high. This imbalance causes concern among the dealers with profit margins squeezed yet again. Add to this the fact that DeBeers is now testing the market with its own polished diamond auctions. Their thought is that the origin will be known and integrity will be provided with dual certification on all diamonds (IIDGR and GIA).

Gray Spinel

The global gem market has been enjoying spinel as a popular gem in recent years. Consumers are more aware of its beauty and rarity and recognize it as a gem in its own merit rather than an alternative to a ruby or sapphire. The confusion of its identification in the recent century caused damage in its reputation in the past as there were many synthetic spinels in the market. Somehow the consumer regarded spinel as an inferior gem. Fortunately, popularity of spinel has gained speed with new finds and better marketing. Despite a few heat-treated samples that have been reported in the gemology journals, the vast majority of spinel on the market is believed to be natural. Natural spinel is one of the more affordable of the fine gems especially compared to untreated corundum.

Burma is known to be oldest source of pink and red spinel. Other notable sources include Tajikistan, Vietnam, Tanzania, Sri Lanka and Madagascar, which produce spinels in various colors and qualities. The more recent discoveries, the Mahenge deposit (in Tanzania), produced some sensational pink to red material and are credited by some for elevating the price structure and popularity of spinel.

Recently, another color of spinel is appearing in the market. Various tones of transparent gray spinels have been offered to buyers and celebrated by collectors. Gray is a very desaturated blue and violet so these stones come with some color flashes. Dealers report smaller sizes of 2 to 4 ct as common, and anything over 7 ct is very unusual. Stones smaller than carat size are much darker gray-black and prices are as low as $15 to $30 per carat. The stones in 2 ct or bigger sizes with good cut quality may reach $150 to $250 per carat at the wholesale level. Gray spinels are not necessarily very high in clarity and the majority of them have eye visible inclusions. Burma and Tanzania are reported to be main locations for…

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