VOL. 15, #4, Winter, 1997

The Emerald Controversy, Auction Report, Fancy Colored Diamonds: A Book Review, US Customs Diamond Seizure, How Crashing Asian Markets May Affect the Gem Markets, International Market Updates: Diamonds, Colombia, Thailand, Sri Lanka, Brazil, Cambodia, Tanzania, Namibia, Collectors Corner, Gem Tidbits, Privacy

  Dec 28, 1997   admin



By Robert Genis

In June, 1997 a jury in Washington, DC found for Dorree Lynn against her jeweler, Blue Planet Gems. She purchased a 3.65 Colombian emerald for $38,500. The jury found the jeweler failed to disclose the emerald had been treated and decided the jeweler had to buy back the emerald plus pay her legal fees of $182,000. Blue Planet's legal fees were $160,000. Without getting into the merits of the case, it is fair to say this decision has caused shockwaves throughout the jewelry industry.

With this as background, NBC's Dateline aired the program "Romancing the Stone" on national television November 21, 1997. This was a hidden camera investigation by Lea Thompson.

The program discussed how colored stones are the rage in America and consumers are spending $321 million a year on emeralds and rubies. Lea Thompson interviewed Dorree Lynn and her husband and briefly discussed her case against Blue Planet Gems. After her emerald was returned to the jeweler to be remounted, a major inclusion became readily apparent. Presumably, this was a result of the heat involved in resetting the stone. NBC then explained the Opticon process. The "reversal" of the Opticoning process resulted in Dorree Lynn's emerald dropping in value from $40,000 to $5,000.

Cap Beesley, President of American Gemological Laboratories, spoke as an advocate for industry reform and stated, "70% of all emeralds are fracture-filled." Beesley noted that if the process reverses, the value of an emerald will drop between 25-40%.

NBC did state that the heat treatment of gemstones and the oiling of emeralds is acceptable in the trade. The FTC does require full disclosure if a gem has been fracture-filled. The AGL stated its position for full disclosure to the ultimate consumer.

NBC next went on a $17,000 shopping spree with hidden cameras. They bought a $5000 emerald from Diamond Quasar on 47th street in New York. They asked the salesman, a man identified only as Jacob, if the stone was totally natural. He said it was and sent them to an appraiser for confirmation. The appraiser stated the emerald was not filled or treated with chemicals.

NBC then purchased a $1600 emerald from Bailey, Banks, and Biddle, a $3300 ruby from Macy's, a $1500 emerald from Fortunoff, and a $4000 emerald from Tiffany's. All of the jewelers stated the stones they were selling were natural, untreated gemstones.

NBC then took the gems to the AGL. Cap Beesley concluded all the emeralds were treated with artificial resin and/or oil. The ruby from Macy's was heat treated and fracture filled with a glass-like substance. (ED note: It was probably a Mong Hsu ruby.)

It was noted that Tiffany's is a client of the American Gemological Laboratories. NBC asked Beesley, "What does this say about the market today?" Beesley responded, "The market is in serious trouble. They do not understand enough about their own product to do a reasonable, rational job to represent it." NBC then sent all the stones to the SGI laboratory in Switzerland. This lab confirmed AGL's results.

What did the jewelers say when NBC returned? Bailey, Banks, and Biddle and Fortunoff both stated they did not know the stones were treated and they have strict policies not to buy treated stones from their suppliers. Further, they stated these stones must have slipped through the system! Tiffany's said they require their suppliers to provide only natural gemstones, but detection is difficult. Macy's said they did not even know about fracture-filling. As a result of the program, Macy's will now require suppliers to disclose if the gemstones have been treated and they will disclose this information to consumers. Diamond Quasar implied he might have been duped by his supplier and said he was going to stick to buying and selling diamonds. (ED note: I find this comment interesting. Since he could not tell if the emerald was fracture-filled, how can he tell if a diamond is lasered or fracture-filled?)

What about Diamond Quasar's supposedly independent appraiser? Unbelievably, he admitted on national television that he knew the stone was treated when he examined it for NBC. However, he said he had to lie to make a living and pay the rent!

NBC then returned to AGL and asked if these excuses were good enough. Beesley responded, "No. It is their business to know about this." Further, "If we tamper with the interests of the ultimate consumer, we have a long term credibility problem. Lets deal with it now."

The program ended with NBC recommending that if you buy a stone, obtain a written guarantee the stone has not been treated. Also, if the filling reverses, you can have the stone retreated for $200. Finally, an independent appraiser can send you to a reputable independent laboratory.

It has been National Gemstone's experience that 99% of all emeralds we see are treated with some kind of filler. We have always felt that it is the job of the jeweler or gem dealer to explain this to the consumer . Since 99% of the colored gems we market have AGL Colored Stone Grading Reports, our clients are definitely aware if a stone has been treated or not. Consumers deserve to know that the stone they are buying is what it is being represented to be. Many jewelers and gem dealers subscribe to The Gemstone Forecaster and I understand you may fear you will lose sales if you disclose treatments. However, it has been my experience for almost 20 years that you can create long term clients by educating them and practicing full disclosure regarding treatments.

Consider this scenario: You go into a car dealer and buy a new Porsche. Later, you discover the car has a Volkswagen engine. Will you ever buy another car from the same dealer? Is this good for the car industry? Of course NOT! The safest course, if you are a consumer buying or a jeweler selling a colored stone over $1000, is to make sure the stone comes with a grading report from an internationally recognized laboratory.


At the October sale, Christie's sold $28 million or 74% of lots. A 30.21, D-IF, emerald cut diamond sold for $63,800 per carat. The 26.14 carat, D-VS2, Raja diamond went for $64,000 per carat. A one carat, pear shaped, purplish red diamond fetched $215,500 per carat. Two Old European cut, grayish blue diamonds with SI clarities sold for $67,360 per carat. A 1.80, circular, light blue diamond, VVS1 sold for $78,610. A 5.89, intense yellow, VS1, rectangular sold for $25,975 per carat. A 1.94, circular, vivid yellow, VS fetched $33,500 per carat. Christie's also sold a cushion, 5.15 Kashmir for $19,700 per carat, a 9.18, Kashmir cabochon for $13,750 per carat and a 12.18, cushion, Burma sapphire for $15,100 per carat.

Sotheby's sold $37 million or 74% of lots. The 5.54, fancy vivid orange, the only vivid orange ever graded by the GIA, went for $238,718 per carat to Ronald Winston. He only bid once after intense bidding on the diamond. He immediately renamed the gem the "Harry Winston Pumpkin Diamond" and plans to mount the stone with two blue diamonds.

Also up for sale were two special diamonds. The Jonker Number 7, a 19.74, emerald cut sold for $827,500 and the President Vargas Diamond, Number 4, at 28.03 sold for $745,000. The gem was found in Brazil in 1938. Rough it was 726 carats before Winston cut it into 29 stones.

Sotheby's sold an 11.75 carat, vivid yellow, oval diamond for $160,850 per carat. A .31, purplish red, radiant diamond went for $185,484 per carat. A 2.23, grayish blue, VS1 (potentially IF) sold for $149,103 per carat. A 1.00, oval, deep pink fetched $85,000. A 5.04, intense yellow, VVS2 brought $31,052 per carat. A 2.16, vivid yellow brought $39,352 per carat. Also, a 8.68, emerald cut, Colombian emerald sold for $26,901 per carat.


"Fancy-Colored Diamonds"
By Harvey Harris
Copyright 1994
DeBeers mines tens of millions of carats of white diamonds every year vs. several thousand fancy colored diamonds. In addition, the vast majority of colored diamonds are melee (diamonds from 1-17 points). It is connoisseur money that is attracted to fancy colored diamonds. Fancy colored diamonds are viewed by collectors in a manner similar to those who quest after famous sculptures and paintings.

India was the all time leading producer of large colored diamonds. These mines produced from 400 B.C. to 1725. Some of the most famous Indian colored diamonds include the 242 carat, faint pink Great Table, the 185 carat, light pink Sea of Light, the 139 carat, citron Grand Duke of Tuscany, and the 112 carat French Blue (later recut to the Hope diamond).

Brazil became the world's next producer of diamonds and is known for its green diamonds. The most famous being the 41 carat Dresden Green, the 40 carat Green Brilliant, and the 33 carat, greenish/yellow Maximilian Two. Also, Brazil produced the 128.80, pale pink Star of the South.

In 1867, in South Africa, the diamond rush began when Erasmus Jacobs found a 21 carat yellow. South Africa is known as a producer of yellow, blue, pink, and brown diamonds. Finally, the only other producer of fancy colored diamonds is Australia, where pinks were discovered in 1979. These stones were the first find of colored diamonds in 113 years.

Causes of Color
The main reasons for color in diamonds are:

  1. Presence of impurity atoms.
  2. Atomic structural defects.

Yellow diamonds are created by nitrogen. It is a scientific mystery what causes the color in orange diamonds. It was thought to be nitrogen but recently disproved. It is now believed it must be a structural defect. Red is probably caused by a structural defect. Pink color is caused by structural defects, as evidenced by graining. Brown is caused by the the stress zones in the crystal. Green is caused by the natural irradiation of the earth, probably uranium ore. This is why the green color is only a few micrometers deep. Blue is caused by the presence of boron. The new Australian blues are colored by hydrogen which causes a blue-gray color. Interestingly, green and pink diamonds change color after the crystals are formed and all others are colored at creation.

The purpose of cutting white diamonds is to produce highly brilliant gems. This is accomplished by shortening the optical light path that is reflected through the diamond. White diamonds are cut according to Marcel Tolkowsky's precise mathematical formulas. However, these precise mathematical formulas tend to "wash out" fancy colored diamonds. This is why cutters utilize fancy shapes such as marquises, pears, etc. In 1976, Henry Grossbard invented the radiant cut. The purpose was to give an emerald cut the life of a round brilliant diamond. An unexpected benefit was fancy colored diamonds tended to face up a deeper color when cut in this manner. This is why we see numerous radiant cut fancy colored diamonds.

For every 100,000 carats of diamonds that are cut, only 10,000 carats are colorless, and 1,000 carats possess fancy color. In reality, 90% of white diamonds have yellow, brown, and gray, although these colors are virtually unnoticeable when a diamond is mounted.

For centuries people have been trying to alter the color of their gemstones. In the 16th century, jewelers used reflective tinted foils when they set stones. Also, jewelers used paint, vegetable dyes, and inks. In the last three centuries we have been using chemicals and optical coatings.

The main way to induce color in diamonds today is irradiation. In 1905, an English chemist buried colorless diamonds in radium-bromide salts. Rind-like layers of blue, green, and yellow formed around the diamonds. Today, the stones are still too radioactive to wear! In 1942, a scientist at the University of Michigan used a cyclotron accelerator to safely and permanently color diamonds. Diamonds can now be colored green, blue, brown, yellow, and black. These diamonds are easily identifiable by major labs.

Color Grading
Although much in this section is obsolete due to the new GIA Colored Diamond Grading Report, the discussion of the spectrophotometer and the colorimeter are interesting.

Fancy Colored Diamond in Jewelry
For centuries, diamonds were symbols of adornment that signified rank, status, and prosperity. Only the extremely wealthy could afford diamonds until the 18th century. The discovery of diamonds in Brazil brought smaller, less perfect diamonds to the middle class. Few were enamored with colored diamonds, and for centuries people coveted white and clean diamonds. It was not until the 1980s that fancy colored diamonds became noticed by the general public.

Why do we see such few pieces of fancy colored diamond jewelry? According to the author, if you wanted to make a piece with 15 carat size D-IF diamonds, you could probably find all the stones you needed in a week. if you wanted 15 fancy yellow diamonds (VS) you might wait years!

Auction Prices
By 1991, 19 of the top 20 per carat prices of gems sold at auction were held by colored diamonds. By the 1990s, 43 of the 58 items that sold for over $100,000 were colored diamonds. With the exception of 1979-1980, colored diamonds have consistently beaten white diamonds' per carat prices at auction.

Of course, the record holder is the .95 purplish red that sold for $926,315 per carat. The presale estimate was $150,000 per carat. Many Christie insiders believed the stone would never sell. Bidding began at $250,000. Why did the stone sell for such a high price? According to the author, 1986 was a period of vast paper wealth and buyers were searching for protection by acquiring high grade assets as a hedge. Further, the .95 red is the gemological equivalent of the Mona Lisa. The stone had value simply because of its rarity since it had no provenance. Further, the stone was not purchased by the Sultan of Brunei, but a private collector.

Fancy Diamonds Through the Ages
Probably the second most famous colored diamond, after the Hope, is the Tiffany. This yellow diamond was bought by Tiffany's in 1877. It was from South Africa and weighed 287.42 carats. It was recut into a 128.51 cushion shape. It was displayed at Tiffany's in New York, Paris, and London.

In 1984, Zales Corporation bought an 890 carat rough. It was cut into a 407.48 brownish-yellow kite shape. It was put up for sale at Christie's in 1988. Bidding stopped at $12 million, short of the $20 million reserve.

In 1967, the Baumgold Brothers purchased a 248.90 South African brown. They cut the stone into a 111.59 orange-brown pear named the Earth Star. It was sold to a Florida private collector in 1983 for $900,000.

Historical and Noteworthy Colored Diamonds
The earliest known red diamond was the one carat Halphen Red owned by a London gem dealer. It was sold in the late 18th century for 800 pounds. It has since disappeared and many speculate this stone is the .95 red recut or repolished. According to the author, recent information disputes this and in fact the .95 red is a new Brazilian diamond.

This book also has a fascinating section on how Argyle of Australia found a 7.48 octahedral rough in 1988. The book describes the cutting process and how the stone ended up a 3.16 purplish-red.

In 1642, Tavernier, the famous gem dealer, bid on a 242 carat, light pink diamond. The seller refused his bid. In the 1730s the diamond was looted from India and taken to Iran. In 1834, the stone was damaged and recut into the 175-190 carat Sea of Light and the 60 carat Nur-Al-Ain. The Nur-Al-Ain was eventually set by Harry Winston and sold to the Shah of Iran.

The Duke of Brunswick bought the 41.75 Agra in 1884. The Duke considered this stone the center of his colored diamond collection. The stone was recut in 1880 to improve clarity and in 1990 to improve color. The stone is now 21.06 carats. It sold at Christie's in 1990 for $7 million.

The most famous orange diamond is the 24 carat Peach Blossom that was part of the French Crown Jewels that was stolen in 1792. An 8.93 orange diamond was sold at Sotheby's for $215,000 per carat. (Ed note: Of course, the 5.54 Harry Winston Pumpkin Diamond probably belongs on this list. See Auctions.)

In 1657, Tavernier saw the 137.27 Florentine which was probably a brown although he described it as citron. Another famous brown diamond is the 109.26 Cross of Asia.

The two most famous collectors of brown diamonds were Cardinal Jules Mazarin, the Chief Minister of France (1602-1661), and the Duke of Brunswick. Of the 18 colored diamonds owned by the Duke, 9 were brown.

Interestingly, the white diamond rush in South Africa was started by the Eureka, a 21 carat yellow diamond. As mentioned before, the most famous yellow diamond is the Tiffany. In 1990, the "Golden Drop", a 18.49 intense yellow diamond, sold at auction for $3.7 million.

The most famous green diamond is the Dresden Green. It is apple green and weighs 40.70. The stone was displayed from 1768 to 1942 in the Dresden castle. The Russians took the stone during World War Two, but returned it in 1958.

Of course, the most famous blue diamond in the world is the Hope Diamond. Follow these links to read about the Hope:
GFN, Fall, 1997
GFN, Summer, 1997
GFN, Winter, 1996

There are no historical large purple diamonds. A 1.04 sold for $89,00 per carat in 1990 at auction.

Cardinal Mazarin reportedly owned a 17 carat square cut gray. The stone has disappeared. In 1989, a 17.79 Fancy Gray sold for $641,100 at auction.

The most famous black is the 67.50 Black Orlov, which was owned by Harry Winston. In 1969, the stone was sold for $300,000. It was resold in 1990 at auction for $99,000.

This is the first book strictly devoted to fancy colored diamonds. This book is worth buying simply because of the photographs. Since most of us only get a chance to see a few colored diamonds, this book is the next best thing. It is 184 pages with 150 color photographs. Strongly recommended!


The Unites States Customs Service recently seized a cache of colored diamonds. The diamonds are presently graded by the International Gemological Institute (IGI), but the government has stated they will be re-graded by the GIA. Here are the major diamonds that will be up for sale. Look for further details in upcoming Gemstone Forecasters.

Size Shape Color Clarity
3.04 Marquise Fancy Blue SI2
2.21 Emerald Fancy Intense Purplish Pink I1
1.97 Square Fancy Intense Purplish Pink I1
1.83 Emerald Fancy Purplish Pink VS2
1.15 Round Fancy Purplish Pink SI1
1.12 Oval Fancy Intense Yellow SI2
1.02 Oval Fancy Purplish Pink SI1


What are the ramifications for gem prices from the weak Asian financial markets? Will this affect the United States diamond and colored gemstone markets? There are two theories that make sense.

First, these dramatic drops will hurt wealthy Asians (the prime buyers of luxury gems), not to mention dealers who may have their wealth intertwined in the real estate and stock markets. If Asian consumers lose money in the financial markets, they should have less disposable income to purchase luxury items such as gemstones. Reports from Asia indicate consumers are selling their jewelry to cover their stock market losses. In Thailand, consumers are selling gold, diamonds, cars, and watches to obtain liquid cash. Diamond prices are weak in Thailand because of this reality. This will have a negative effect on gem prices. Is this the reason gold is trading under $300 per ounce? If this scenario turns out to be true, Southeast Asian gems should be less expensive overseas.

The opposing view regarding this situation is that Asians traditionally have a high regard for gold and gemstones. Recent Asian auction buying seems to indicate that wealthy Asians are turning to gold, diamonds, and colored gemstones as currency hedges. Once you lose faith in financial markets, where are you going to put your money? Into private, portable vehicles like gold and gemstones. If this scenario plays out, you can expect colored gemstone prices to rise as Asian buyers place more and more of their assets into gems.

Finally, it must be remembered that the United States is the largest consumer of diamonds and gemstones in the world. It may also come to pass that the effect of the Asian turmoil will be negligible, irrespective of what transpires there.


Argyle Pinks
The recent tender of 55 fancy intense purplish red and pink diamonds sold for record prices. The sale broke the previous record of $4.5 million, but exact figures were not released. However, the average was over $100,000 per carat. The exact prices were kept confidential but Argyle said the prices were "exceptional." The main stone was a 1.78 oval purplish red. A total of 59 stones weighing 58.64 were sold. The Australian pinks represent 0.1% of Argyle's production.

"So..You Need A Diamond"
In a recent article by Fred Cuellar in "The Wedding Pages", he states:

  1. The average person pays twice as much as they should for an engagement ring.
  2. One out of three diamonds is laser drilled.
  3. The average diamond sold in the United states has been overgraded.
  4. Eighty percent of fancy cut diamonds are cut to save weight resulting in diamonds that have lost their potential sparkle.
  5. Three out of five diamonds sold are incorrectly weighed.

What is the solution? Simply buy a diamond with a GIA Diamond Grading Report!

Deal with Russia
DeBeers and Russia finally signed a 13 month agreement after three years of negotiations. The agreement ends in December, 1998, with a two year renewal option. DeBeers stock fell on news of the agreement. Here are the highlights:

  1. Russia will sell DeBeers $550 million worth of diamonds. Russia's annual production is about $1.2 billion. The diamonds will be of all shapes and qualities.
  2. DeBeers will buy $1 billion worth of diamonds that Russia cannot cut economically.
  3. Russia will sell 5% of the first $550 million to the open market as a price checking mechanism. There is a 20% market window for Russia to sell other diamonds.
  4. DeBeers will sell Russia diamonds to help nurture the Russian cutting industry.
  5. There will be regular meetings between Russia and DeBeers.

Antwerp Woes Continue
Belgium police recently arrested 10 more diamond dealers. All were arrested in conjunction with the collapse of the Max Fischer bank. The police also raided a currency center in the middle of the diamond district, looking for transactions involving the trading of diamonds for drugs. Many Antwerp diamond dealers are considering relocating to other countries.

The October elections in Colombia caused widespread violence. Rebel forces killed 24 candidates, kidnapped dozens, and forced hundreds to withdraw from the elections. Rebels also attacked a hydroelectric plant, causing power shortages. The Colombian peso started to fall as nervous international investors began pulling their money out of the country. President Samper offered to negotiate with the rebels but they refused.

New Emerald Treatment
A new emerald treatment, Gematrat, was recently introduced. According to the producers of the treatment, it is colorless, stable, and permanent. You can put treated gems in an ultrasonic cleaner, a steamer, and even recut the stone without damage. We will be submitting samples for treatment and the results will be discussed in future newsletters.

Bangkok Gem and Jewelry Fair
The show was very slow and most exhibitors barely paid for the cost of their booths.

This is the second largest gem capital (after Bangkok). The area continues to thrive as a cutting center. Prices are supposed to be lower than Bangkok. This area has been removed from the financial difficulties, such as bank closures, of Bangkok.

Gems Not Affected by Rebels
Gem production is still operating despite recent rebel attacks. The Tamil rebels have been concentrating their attacks around Colombo, but have not targeted the mines. The mines are located 50-60 miles east of Colombo.

Expo Sri Lanka `97
The show featured once-in-a-lifetime large blue sapphires. The Sri Lankans are competing with the Thais by cutting their own goods. At one time, all the rough was shipped to Thailand for heating. The Japanese have stopped buying from the Thais because they refuse to disclose what they have done to the stones. The Sri Lankan dealers are disclosing to the Japanese when they heat stones. Also, the Thais are known for their use of heavy equipment in mining and the Sri Lankans still depend upon manual labor.

International Colored Gemstone Association (ICA)
The conference was held in Belo Horizonte, Brazil. This is the organization which ran the Year of the Ruby promotion. Most dealers said their ruby sales increased between 25-50% due to the promotion. Due to lack of funding, there are presently no more promotions planned.

The ICA finally reached agreement for disclosing the treatment of gemstones. Here is the letter code:

  • N: Unenchanced gems
  • E: Stones that have been heated or clarity enchanced by colorless oil or resin.
  • T: Stones that have been coated, diffused, dyed, treated with Joban oil, glass-filled, irradiated, or lasered.

(ED: Although this should not affect clients who buy/sell with AGL Colored Stone Grading Reports or GIA Diamond Grading Reports, it is a code that will be used among dealers. Hopefully, this will begin a process of full and open disclosure to the ultimate consumer.)

Cambodia remains in the middle of a civil war. Meanwhile, there are still five or six Thai miners searching for blue sapphire around Palin.

The Tanzanian Mineral Dealers Association put off its August auction due to lack of production. Expect higher prices in this material.

Mandarin Orange Garnet
Production of the beautiful mandarin orange garnet is now halted due to a cave-in at the mine. Although no one was hurt because the workers were at lunch, this means it will take considerable financing and heavy equipment to get the mine back on-line. The mine was producing 20-25,000 carats a year, with 85% going to the Far East. Gems over 1.50 are non-existent and prices have doubled.


Peridot (Hardness 6.5-7)
Peridot is the gem variety of olivine. It is created by volcanic pressure. Peridot is sometimes found in meteorites that land on earth. Due to the presence of iron, the gem only occurs in green. Colors range from a light yellow green to 7-Up bottle green.

Peridot was originally mined in ancient Egypt. It was reported to be Cleopatra's favorite gem. Many believe the famous Egyptian emerald mines were in fact peridot. The Romans called the gem "evening emerald" since its color remained the same at night. European churches are adorned with gem peridot. The 200 carat plus peridot which adorns the Three Magi at the Cologne Cathedral was believed to be an emerald until the 19th century. The Smithsonian has a 310 carat peridot from the St. John Island in Egypt.

Most peridot is mined today by Apache Indians on the San Carlos reservation in Arizona. The problem with the Arizona peridot is it usually only occurs in small sizes, up to three carats. Peridots are also mined in Burma and China. In 1994, peridot was discovered in Pakistan's area of Kashmir. The mine sits above 15,000 feet.

Due to the gem's softness, do not subject the gem to rapid temperature changes or put the stone in hydrochloric or sulfuric acid. Also, be careful when mounting the stone.

Peridot is a relatively inexpensive gem and can be purchased for $100-$200 per carat up to 8 carat sizes. Large 20-40 carat Burma or Pakistan gem peridot can fetch $150-$300 per carat. Peridot's best color depends on mass. The larger the peridot, the easier it is to find a vibrant green. These gems are not heated or irradiated.

Morganite (Hardness 7.5-8.0)
Morganite is the pink variety of beryl. Morganite is from the same family as emerald and aquamarine. Beryl is derived from the Greek word "berullos", which meant crystal. Morganite mostly occurs in pegmatites within granite rocks. Morganite was named after the banker and gem collector J.P. Morgan. George Kunz wanted to honor J.P. Morgan for his gem donations to the American Museum of Natural History. Also, J.P. Morgan was his best client and George Kunz traveled the world finding gems for him. The gem is colored by traces of manganese. Morganite varies in color from pastel pink/peach to lavender. The larger the stone, the better the color. Small stones tend to wash out. It was first discovered in California. The first commercially viable source of the material was Madagascar in 1908. There are also deposits in Brazil, Mozambique, Namibia, Afghanistan, and Russia. The largest and most well known Morganite is a 598.70 cushion from Madagascar in the British Museum collection, although the American Museum of Natural History has quite a collection. Many Morganites start as peach color but they will fade. Therefore the stones are heat treated to stop their colors from fading and create permanent pinks.

Kunzite (Hardness 6.5-7)
Kunzite is the pink variety of spodumene. The most famous Kunzite is a 880 carat gem at the Smithsonian. Kunzite is trichroic which means there is a color intensity variation when the crystal is viewed from top to bottom or from other directions. The top and the bottom of the crystal have the deepest colors. Therefore, the gem must be cut along its C-axis for the best color. Kunzite also has perfect cleavage in two directions, which means a sharp blow can cause the gem to break in half. Due to the gem's trichroism and cleavage, the gem should be considered fragile. The gem is named after George Kunz, the famous buyer for Tiffany and Co. in the early 1900s. He was a pioneer in the science of gemology and wrote "The Curious Lore of Precious Stones".

The stone was first commercially mined in California in 1902. It is usually found with Morganite and pink tourmaline. Today the stone is mined in Afghanistan, Madagascar, and Brazil. The stone varies from lilac to pale pink in color. Ideally, you want a deep pink lavender. The larger the Kunzite, the better chance it has to be vibrant pink. The most intense Kunzites occur at 30 carats plus. Kunzite trades for $50-60 per carat under 10 carats and can reach $100+ per carat for fine gems. Kunzite is usually a clean gemstone. It should be protected from light and heat because it tends to fade. Kunzite is both heated and irradiated.

Red Beryl
Gemstone Mining Inc. (GMI) recently bought out the three year option from Kennecott Exploration Co. for $41 million for the Ruby Violet Mine in Utah. GMI hopes to produce 25,000 carats per year. The problem with red beryl production has been only collectors will pay a premium to get the material. The new company plans to cut all qualities of red beryl, not just the top gems and market the stone in Asia. Kennecott was yielding less than 9% from rough to finished gemstones. A new marketing program will be launched that hopefully will maintain the stone's collector status but create more demand for lower quality gems and mineral specimens.

Rumors appear real that a new demantoid deposit has recently been discovered. The new finds are of relatively large size and gem quality. Colors range from yellowish green to green to blue-green.


Princess Di's Jewelry
It is believed that Princess Di owned about $27 million worth of jewelry. Many of the pieces were handed down from the Queen. She wore the 1914 Queen Mary tiara with pearls and diamonds. When she was married, Queen Elizabeth gave her a $3.2 million emerald and diamond choker. Diana often wore it as a headband. She also will be remembered for her love of pearls. All of her jewelry will be returned to the royal family.

Meanwhile, the Russian diamond agency, ARS, will name a 64.22 carat diamond after Princess Di. It was discover two days before her death.

Gem Robberies
On October 8, 1997, the Coin and Jewelry jewelry store in Oregon was robbed by two armed men in less than 10 minutes. They ordered the owner and an employee to lie face down in the back room. One man cleaned out the display case and the other was a lookout. They threatened to kill them both. They fled by car with about $30,000 in gold chains, bracelets, and necklaces, $30,000-$40,000 in diamonds, and some Black Hills Gold jewelry. The owner went outside to get the robbers' license plate and was shot at. The shots missed him by a foot. Police arrested two suspects and more arrests are expected.

Two armed robbers stole $1.7 million in gems from Cartier in London. They entered a Cartier workshop through a skylight and threatened two workers with shotguns before escaping with the valuables. Cartier is insured and stated none of the gems belonged to clients.

Rapaport Diamond Report
October, 1997
An Interview with Henri Barguirdjian, CEO of Van Cleef and Arpels
"Colored stones (ED note: As opposed to diamonds.) don't get as much interest from consumers. A fine ruby is rarer than a D-Flawless, but few people know that."


What does the IRS know about you? When you fill out your tax forms, be aware the IRS has this information at their fingertips:

  • Wages
    The W2 reveals details of regular income, bonus payments, severance pay, and allowances.
  • Freelance Payments, Income from Rentals, Royalties, Awards, and Prizes
    All payers of money which would be considered income must fill out this form.
  • Interest Income
    Banks and other financial institutions must report interest payments you have received.
  • Tax refund
    State and local governments report refunds you receive.
  • Gambling
    Winnings over $600 are reported on W-2G.
  • Mortgage Interest
    Banks and mortgage companies report this amount directly to the IRS.
  • Pension Plans
    Pension information is also reported.
  • Cash Payments
    If you receive a cash payment over $10,000 the payer is obligated to report this amount to the IRS.
  • Cash deposits
    If you deposit over $10,000 to your bank, the bank reports this to the IRS.
  • Social Security Payments
    The Social Security Administration reports this amount.
  • Medical Payments
    Insurance companies report this amount.

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The information provided in this newsletter has been derived from research and sources believed to be reliable. However, no guarantee is expressed or implied as to their validity. Opinions included herein are subject to change without notice. The gem market is speculative and unregulated. Certification does not eliminate all risks associated with the grading of gems. Recommendations are meant for those who are financially suited for the risks involved. Past performance is not a guarantee of future performance. Neither NGC nor The Gemstone Forecaster guarantee a profit or that losses may not be incurred as a result of following its recommendations. They may also hold positions in areas they recommend. Subscribers should not view this publication as investment advice, nor is it intended as an offer or solicitation with respect to the purchase or sale of any security.