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Industry News: New Jewelry Council Begins; Diamond Prices Down Again; Gold To Drop Below $1000; More October 14, 2015 (0 comments)
U.S. Jewelry Trade Unites To Address Key Issues Impacting All Players
New York, NY—Leading U.S. jewelry trade associations representing all sectors of the industry have come together to form the United States Jewelry Council (USJC). The goal of the Council is to work more closely together to ensure the U.S. jewelry industry is collectively represented at government and international levels, as well as dealing more effectively with key issues like social, ethical and environmental matters that might impact the U.S. jewelry industry.
Council members include:
- American Gem Society (AGS)
- Diamond Council of America (DCA)
- Diamond Bourse of Southeast United States (DBSE)
- Diamond Dealers Club of New York (DDC)
- Diamond Manufacturers & Importers Association of America (DMIA)
- Indian Diamond and Colored Stone Association (IDCA)
- Jewelers of America (JA)
- Manufacturing Jewelers & Suppliers of America (MJSA)
- Natural Color Diamond Association (NCDIA)
Ronnie VanderLinden, president of the DMIA, has been elected president of the Council. David J. Bonaparte, president and CEO of JA is treasurer, and Ruth Batson, CEO of AGS is secretary. James Evans Lombe, director of ethical initiatives for JA, has been appointed CEO of the Council.
The member organizations, whose combined memberships represent the vast majority of the U.S. jewelry industry, believe U.S. businesses need a united voice on issues as diverse as environmental mining standards, factory working conditions, full and proper disclosure of all relevant information about a piece of jewelry before sale, as well as any other issues that can impact consumer confidence in the diamond and jewelry industry such as the financial regulations on anti-money laundering or the international systems to prevent the re-occurrence of conflict diamonds.
The new USJC is a member of the World Diamond Council, working with the WDC to enhance the U.S. jewelry industry’s voice in the Kimberley Process.
“The success or failure of U.S.-based jewelry businesses—and the entire diamond and jewelry supply chain—is in large part dependent on a healthy representation of U.S. businesses in the national and global arena,” says VanderLinden. “These challenges on the national and global scale are more than an individual association can handle alone. The U.S. industry needs a coordinated effort to ensure we can protect consumer confidence in our product and have a say on policies that affect the livelihoods of our members.”
Along with the growing shift in consumer awareness and attitudes, pressure from governments and non-governmental associations remains high and intergovernmental and other global initiatives, such as the Kimberley Process and the Organization for Economic Cooperation and Development (OECD), are tied closely to consumer confidence in the U.S. jewelry market. By joining forces, the associations combine their expertise and experience with the aim of having greater influence in dealing with challenges facing the U.S. jewelry industry on a national and global scale.
“As representatives of the fine jewelry industry in the U.S., we have to work together to represent the common concerns of our respective memberships and our consumers,” says Batson. “Jewelers represent the last, critical, link to the final purchasers of jewelry. We know jewelers are at the forefront of ensuring that consumers keep their trust in jewelers and jewelry products, ensuring that both the customer and the entire jewelry industry are protected.”
Andrew Keller, deputy assistant secretary in the U.S. State Department’s Bureau of Economic and Business Affairs, said, “We look forward to engaging with the U.S. Jewelry Council and continue to support U.S. industry’s effort to lead by example in the areas of responsible sourcing, supply chain transparency, and ethical business conduct.”
For further information, please contact info@jewelrycouncil.org.
The new council's logo.
Polished Diamond Prices Slide Again in September
New York, NY—Prices for one-carat GIA graded diamonds fell 6.3% in the third quarter of 2015. According to the RapNet Diamond Index (RAPI), U.S. demand is steady as the holiday season approaches but Chinese buyers still are restrained due to a slowdown in economic growth in China and Hong Kong.
Wholesale and retail buyers are avoiding excess inventory and buying to fill existing orders. Suppliers are holding large inventories that are difficult to sell in the current weak market. At the same time, there is a shortage of SI-clarity diamonds that are in strong demand for the U.S. market, while manufacturers have reduced production by 30% to 50% this year due to high rough prices. There are opportunities for buyers with cash—but no urgency.
The RAPI for 1-carat, GIA-graded diamonds dropped 3% in September. RAPI for 0.30-carat diamonds declined 2.7%, and for 0.50-carat diamonds, 2.2%. RAPI for 3-carat diamonds fell the most during the month, 4.8%. The third quarter saw RAPI for 1-carat diamonds decline by 6.3 percent while the index on October 1 was down 13.9 percent from a year ago.
Consistent U.S. consumer demand is providing stability and compensating for weak demand in other markets. U.S. jewelry retail sales increased by low single-digit percentage points since the beginning of 2015 and the trend is expected to continue throughout the Christmas shopping season. U.S. consumer confidence improved in September despite recent stock market losses.
Rough diamond trading remains difficult as manufacturers have reduced production until the November Diwali break in India. ALROSA reduced rough prices by 8% to 10% in September, following similar cuts by De Beers the previous month. De Beers sightholders deferred a large volume of rough again at the October sight, estimated at $200M.
There are very few fresh goods coming into the market. Manufacturers hope that jewelers will reduce their inventories during the upcoming holiday season, stimulating stronger demand in the first quarter of 2016. Despite otherwise weak conditions, those expectations have helped lift the mood in the diamond trade after a quiet third quarter.
First Global Emerald Symposium Wraps Today
Bogotá, Colombia--The inaugural International Emerald Symposium in Colombia opened October 13, with a wide range of international emerald experts from government and the private sector addressing the current state of the global emerald business and the challenges it faces. The conference, attended by 320 representatives from around the world, was the first time emerald producer countries had come together at a high-level international gathering to address issues relating to the emerald business in the same way that diamond-producing countries and industry leaders do. The meeting was organized by Fedesmeraldas, the Colombian Emerald Federation, and supported by all the country's emerald-related bodies and the Ministry of Mines and Energy.
The Symposium addressed the challenges and opportunities faced by the emerald industry including resource management, manufacturing, treatments, certification, nomenclature, technology, consumer education and branding. The Symposium organizers said they expected the conference to lead to a harmonization of the global emerald industry along the lines of that achieved by the global diamond business at a time when demand for emeralds worldwide is strong.
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NCDIA Launches Global Forum Initiative On Natural Color Diamonds
New York, NY—The Natural Color Diamond Association (NCDIA) will continue its new conference program internationally in Australia, London, Antwerp, Israel, and Hong Kong, to build the awareness in the natural color diamond category. Conferences will discuss a wide variety of topics from the market, rarity and value, natural vs. synthetic and retailing.
The conference series has already hosted two events, one in the United States and one in India. The recent New York event focused primarily on the natural pink diamond category, on conjunction with the “Pink Event” presented by Argyle Pink Diamonds at the W Hotel. That was an all day event highlighting rarity and value and retailing natural pink diamonds. In India, the NCDIA conference was “Enter the World of Natural Color Diamonds” at the GIA India Laboratory, Mumbai. Both conferences were very well attended.
The NCDIA event in New York was well attended.
The Natural Color Diamonds Rarity discussion will be held November 15 at the Israel Diamond Institute. Panel moderator will be Danielle Max of IDEX magazine; panelists include Leibish Polnauer of Leibish & Co., Oren Benma of Benma Fancy Diamonds, and Shelley Kabilu of Shelley & Co.
Upcoming conferences in Australia, London, Israel, Hong Kong and Antwerp will be announced shortly. For more information or to register, contact Gino Di Geso, NCDIA director, (212) 644-9747 or gino@ncdia.com
100 Diamond Firms To Be At Diamond Week Next Week
Ramat Gan, Israel—About 100 Israeli diamond will join their colleagues of the Diamond Dealers Club of New York (DDCNY) next week to exhibit an unparalleled collection of polished diamonds during the fourth edition of the Israel Diamond Week in New York. The event will be October 19-22 on the trading floor of the DDCNY, 580 Fifth Avenue in midtown Manhattan.
Natixis Precious Metals Update: Expect Gold Below $1,000
London, United Kingdom—Natixis, the corporate, investment, insurance and financial services arm of French banking Groupe BPCE, has released its forecast for precious metals for the remainder of 2015 and into 2016.
This year, precious metals prices have been mainly driven by expectations around the Fed interest rate hike. For 2016, it will be vital to keep a close eye on anticipated interest rate hikes, which will be especially important for gold and silver. Also in the next few months, new diesel car sales in Europe will show if there has been a fundamental shift in the market in favor of gasoline; a development that could potentially weigh very heavily on the platinum industry. Here is the summary of Natixis’s predictions for gold, platinum, and silver:
Gold: Natixis believes the price of gold will continue to be heavily influenced by the Fed’s interest rate decisions; indeed, the expected path of interest rate hikes will be the main driver behind the price of gold. The U.S. economy is growing and is expected to continue to do so into 2016-17. A strengthening dollar and higher yields could continue to contribute to the lowering of gold prices, especially considering the fact that rising interest rates increase the opportunity cost of holding gold. Loose monetary policies in Europe and Japan will help weaken these currencies versus the dollar, which will further strengthen the greenback. On a more supportive note for gold, Indian demand for the metal is expected to rise next year as the economy continues along its growth path. Natixis sees gold averaging $990/oz next year and for 2017, prices could average $1,020/oz; they're expected to rise as mine supply starts dropping.
Silver: Looking to 2016 and 2017, the firm and historical relationship between silver and gold is expected to strengthen again. Natixis expects silver prices to remain under pressure from improvements in the U.S. economy and the much-anticipated interest rate hike. As interest rates rise between 2016 and 2017, so the opportunity cost of holding silver increases. The share of investment demand has dropped to 18% of total demand in 2014 and we expect it to continue dropping towards the historical average of 8% - 9%. With demand for silver from the electronics industry expected to rise only slowly, the group doesn't expect this level of demand to compensate for the drop in investment demand. It predicts silver prices averaging $12.80/oz in 2016 and $13.40/oz in 2017.
Platinum and palladium: Natixis is bullish on a platinum recovery (should a fundamental shift in consumer preference towards gasoline in Europe not take place). Although the organization generally believes there will be a tendency for a drop in diesel automobile demand, it maintains that prices are well below where they should be. Several elements allow us to think that platinum prices could receive more support:
- European automobile demand (as second largest consumer of platinum) is rising. The latest figures indicate a 12% yoy rise in new car sales during the month of August.
- China is keen on combating pollution and tightening emission rules, and the content of platinum in autocatalysts should increase. That said, the collapse in the Chinese stock exchange has dented automobile demand for the time being.
- Producers are starting to shut production, with some operating below cash costs of production.
- With gold prices trading at a premium over platinum, Chinese platinum jewellery demand (the largest source of demand for the metal) should rise.
- Platinum imports into China are rising again, having dropped from 2014 and into early this year, due to over-stocking in 2013. The latest data indicates that imports rose in August by 16% yoy, to 8.78 tonnes.
Natixis platinum forecasts are $1120/oz for 2016 and $1375/oz for 2017. Prices in 2017 could further benefit from expected lower mined output and stronger automobile sales in Europe. For palladium, Natixis expects growth in automobile demand from countries that are heavy users of gasoline, although perhaps at slower pace than in previous year if the Russian and Brazilian economies remain weak. Their forecasts for palladium for 2016 and 2017 are 715/oz and 740/oz respectively.