October 2011 Newsletter: Gemstone Trends

This month our feature article looks at gemstone trends based on our experience at the recent Hong Kong gem fair. The Asian market is driving gem prices higher and the investment community is starting to notice.

Also in this month's newsletter ... notable gems from Hong Kong, volatility in the price of gold and standards for describing fracture-filled ruby.



The September Hong Kong Gem & Jewellery Fair

We've just returned from a week in Hong Kong at the September gem show. The show was bigger, if not better, than ever, with more than 3,400 exhibitors from 46 countries and regions at the two major exhibition venues in Hong Kong. Colored gemstones and diamonds were at the AsiaWorld-Expo next to the airport, with finished jewelery at the convention center in Wanchai.

The show has become so large that it can be overwhelming for many visitors. It can be difficult for new attendees to locate the fine gems in a sea of commercial grade material. Experienced buyers come prepared with a list of selected dealers to visit. 

The reason the show has grown so large is that demand from China has been exceptionally strong. The Hong Kong fair has always attracted a loyal international following, but new money in China has begun to outbid cautious Westerners for fine gems. The trend is so significant that it has been noted by the financial press. A week before the show the Economist magazine, which rarely if ever reports on the gem business, published an article on surging prices for colored gems. According to the Economist, there are three main forces pushing gem prices higher: demand from faster-growing economies like China and India; economic insecurity; and supply shortages.

Gemstones, like gold, are seen as a tangible store of value in uncertain times. Though not as liquid as gold, gemstones are more portable and the supply of fine gems has fallen while demand is rising. 

From our own booth at the fair we saw strong interest from mainland Chinese customers. Other Asian buyers were very active and we had customers from Taiwan, Hong Kong, Korea and Japan as well. European buyers were also active and Russia has become another important emerging market.

We saw strong interest in tourmaline, especially from Chinese buyers, with rubellite and bi-color stones in larger sizes at the top of the list. Our Nigerian spessartite garnet also sold exceptionally well, probably because we still have stock in the top orange color and we have not increased our prices on this rare material. Other popular gems included sapphire, spinel, tsavorite garnet and kunzite.


Notable Gems from the AJS Collection

This month we feature gems that attracted special attention at our booth at the Hong Kong gem fair.


54.75 ct Rubellite Tourmaline from Mozambique  [SOLD]

Very large rubellites are not unknown, but they almost always have significant inclusions. We showed two rare clean rubellites in very large sizes -- the 54.75 ct deep red pictured here, and a 55.54 ct pink-red. We've graded the 54.75 ct as "almost loupe clean", which is almost unheard of for a huge rubellite. The color is a true ruby-red, also very rare for rubellite. See all our rubellite tourmalines.


6.28 ct Unheated Yellow Sapphire from Sri Lanka  [SOLD]

Unheated yellow sapphires tend to a pale yellow, and that's why so many are heated or diffusion treated to enhance the color. So an unheated sapphire in an intense canary yellow is a rarity, especially in the 6 carat size. This outstanding gem is well cut in an 11 x 9 mm cushion and is certified as unheated by GRS. See all our yellow sapphires.



10.14 ct Spinel from Mahenge, Tanzania  [SOLD]

This is one gem that could easily be seen from across the aisle in Hong Kong. One of the finest examples of Mahenge Spinel we've seen, this 10 carat trillion has incredible fire and a neon-like glow under any lighting. Certified by GRS as "vibrant pinkish-red", this is an exceptionally clean and well-cut gem in the finest spinel color. Just a fantastic gemstone. See all our fine spinels.


6.65 ct Spessartite Garnet from Nigeria  [SOLD]

We've been proud of our spessartite garnet collection, but we didn't expect such an enthusiastic reception in Hong Kong for these fine Nigerian garnets. The fact that it impossible to buy new material of this quality is probably one of the reasons. This 12 x 10 mm mandarin orange oval is a good example -- top color, clean, well-cut and displaying the brilliance and sparkle typical of the best spessartites. See all our spessartite garnets.



136.57 Color Change Fluorite [SOLD]

Unique collector's stones always draw attention at important gem shows. This 136.57 ct color-change fluorite exhibits a striking color change from a sapphire blue to an amethyst-like violet. A savvy collector purchased this unusual gem on the first day of the show. See all our color-change fluorites.


4.64 ct Tsavorite Garnet from Kenya  [SOLD]

We showed a number of high quality tsavorites in Hong Kong, but many eyes were drawn to this 4.64 ct oval from Kenya. With its saturated green and a medium tone, this very clean gem displays all the sparkle and fire that has made tsavorite such a favorite with gem connoisseurs. Fine tsavorites over 2 carats are rare and top specimens over 4 carats are rarer than ruby or sapphire. See our tsavorite garnets.


News from AJS and the Gems World

  • Gold prices hit a new high of $1,961 a troy ounce on September 6th, followed by a rapid decline to $1,531 in a record 4 day selloff. Some analysts were predicting an end to the gold bubble. However, prices have since stabilized around $1,625 and physical demand for gold from China and India is expected to support prices. The jewelry industry would love to see a return to a gold price of $1,000, but there are no signs at the moment of a sustained decline.

  • Two of the world's leading gemological laboratories, American Gemological Laboratories (AGL) and GemResearch Swisslab (GRS) have announced that they will work together to harmonize the description of lead-glass treated rubies for the gem and jewelry trade. In their announcement, the two labs made it clear that the lead-glass filled ruby needs to be clearly distinguished from natural heated rubies in the market, since the glass-filled stones can be seriously damaged by ordinary household chemicals or routine repair by a bench jeweler. AGL is now describing these rubies in their reports as "Composite Ruby", with the comment "This stone is a composite of natural ruby and a high lead content glass. Also known as Hybrid Ruby." GRS is using the identification "Synthetic Glass/Treated Ruby (GRS-type “Hybrid Ruby”)" with the comment "Heat-treated and filled with a colored foreign solid substance (including lead). Special care required when handling. Also known as Composite Ruby".


Ask the Gem Experts

Each month we answer questions from our customers. We welcome your questions and you can submit a question from our contact page.

I enjoy your newsletters and find them very informative. How can I read back issues of your newsletter? PT, Australia

We introduced a new newsletter format in July this year, so we don't yet have a large number of back issues. But you'll find links to all our newsletter issues as well as our original gemstone articles in our article index.

What is the meaning of the term "bluff stone"? Does it refer to synthetic gems?  

No, the term "bluff stone" is used by gem dealers to refer to a natural gem, usually in a large size, that is priced low because of a significant defect, such as serious inclusions, color zoning or poor cutting. When placed in a decent setting, these stones can often appear much more expensive than they are. The term "bluff stone" is usually, but not always a pejorative, since there are some high quality gems which tend to look more expensive than their price, because they "face up" well,  or have a superb color (but some inclusions), or some minor cutting flaws that lower the price. Value buyers often seek out such gems.


All the best in gems,

Arnold, Rung & Ron