A Diamond With Your Coffee – Diamonds Outperform Market in H1
Posted: 5 Jul 2010 | Author: admin
Investment Diamonds surge, leaving the traditional investment market standing. Investment diamond prices eased up a further two percent in June ending the first half of the year up 17 percent and thus outperforming the overall investment market.
Considering that global financial markets remained relatively turbulent during the first half of the year, the rise in investment diamond prices is even more impressive. When compared to other commodities or even other ‘lifestyle investment’ asset classes, investment diamonds faired extremely well. In fact it seems that investment diamonds were only outperformed by coffee whose price spiked some 20 percent in mid-June on the back of severe shortages.
Investment diamond prices have rallied since January, sparked by a rebound in demand from major diamond consuming markets coupled with the severe reduction in diamond production that prevailed since the onset of the global financial crisis in late 2008. As the markets began to rebound the diamond pipeline was sapped of supply which in turn caused a scarcity of available goods across all diamond trading markets around the globe. This only exacerbated the already existing dynamic of demand outstripping supply that has been prevalent in the investment diamond market since 2003/4.
While gold has been making all the headlines being touted as a superior ‘safe-haven’ asset producing a return of 14 percent since the beginning of the year, investment diamonds outperformed gold and yet have remained just beneath the radar screen of the alternative investment community. This is sure to change as savvy investors and investment professionals continue to seek out non-correlated inflation-hedged tangible assets.
The outlook looks good for investment diamond prices with annual demand growth returning to its natural level of eight to ten percent while annual production growth will hover around low single-digit figures. This disparity is not set to change in the immediate future as no world class diamond mine discovery with the potential to impact upon the supply curve has been made in the last decade and even if there was to be such a discovery in the near future it would probably take around seven years for the mine to be ramped-up to producing commercially viable output levels. Moreover, investment diamond prices are still below the levels reached in the first half of 2008, giving further impetus for the upward price trend to continue.
We expect the pace of the price growth of investment diamonds to ease in the immediate future with the summer months traditionally being a slower period coupled with the realignment of the demand and supply curves back to their normal equilibrium bands as more supply enters the pipeline. Given the better-than-expected H1 performance we have revised our initial 2010 expectations upwards with investment diamond prices expected to return approximately 20 percent in 2010.View Full Article
Bullish Gold Prices Reflect Global Market Concerns
Posted: 29 Jun 2010 | Author: admin
The Epoch Times - Gold almost reached trading above last week’s record high. Several factors could have kept the precious commodity at bay. The post G-20 Summit’s negative sentiment set the pace for the global economic recovery concerns. Also, the head of the CIA announced that Iran could produce two atomic weapons in the next two years.
Nevertheless Rick Bensignor, chief market strategist at investment banking group Execution Noble LLC said that gold’s daily sentiment index was also at an extremely high 90 percent bullish sentiment on Monday June 28, and that added to the metal’s vulnerability.
Analysts have predicted that the price of gold will be influenced by the levels of eurozone debt and the stability of the region’s banking system, which is still uncertain.
“Really the big driver is investor perception, investor risk appetite and do we see any nervousness over the European (debt) issue,” said Societe Generale analyst David Wilson in an interview with Reuters.
“The underlying safe haven concerns have supported prices—the economic environment, Europe’s fiscal outlook, and the longer term prospects for inflation,” said David Moore, commodities strategist at Commonwealth Bank of Australia.
“The G-20 hasn’t had a significant impact on markets, and while concerns about Iran’s nuclear capacity are nothing new, there seems to be additional clarity.”
Spot gold was at $1,240.45 an ounce by 2:33 p.m. EDT, compared with $1,253.40 in New York on June 18.
“Sentiment is still quite brittle, so we can get intraday moves in either direction, but the longer gold stays above $1,250 and consolidates, the more likely we are for a leg up rather than a leg down,” commented Wilson.
Among other precious metals, silver was at $18.77 an ounce, from $19.04 late in New York, as well as the platinum group metals complex, platinum was down 0.2 percent at $1,564 and palladium was down about 1.4 percent at $466.50.View Full Article
Will the Issue of Conflict Diamonds Have An Effect On Diamond Prices?
Posted: 29 Jun 2010 | Author: admin
The issue of non-ethical diamonds is once again coming to the fore with serious concerns surrounding Zimbabwe’s compliance with the Kimberley Process. Industry leaders have been tackling this issue this week during the three-day Kimberley Process Intersessional Meeting in Tel Aviv. The meeting was due to draw to a close on Wednesday June 23, however with discussions deadlocked on the issue of whether Zimbabwe can continue to qualify to partake in the Kimberley Process, the intersessional meeting has been extended in the hope of attaining a clear decision on the matter. In the meantime the issue of conflict diamonds has started to bubble to the surface with heightened exposure in the press and increased pressure from NGO’s to considerably strengthen the fight against non-ethical diamonds. From our perspective, the issue at hand is what effect, if any, this heightened exposure of the conflict diamond issue will have on the diamond industry as a whole and more specifically on the investment diamond market.
This is not a new issue and the diamond industry as a whole has made tremendous in-roads over the last decade into tackling these challenges and working towards curing the industry of non-ethical diamonds whilst endeavouring to ensure true beneficiation is created for diamond producing countries. Undoubtedly there is still a tremendous amount that needs to be done however hopefully in the long run these current deliberations will be viewed in terms of the effective ongoing process the diamond industry is undertaking to stamp out non-ethical diamonds. The risk is whether the seeming lack of decisive affirmative decision and action to eradicate non-ethical diamonds will flow through to the evermore ethically conscious consumer market where issues such as these can have a snowball effect.
As it currently stands we believe that the affirmative action taken by the diamond and related industries over the last decade has considerably sufficient momentum to negate any severe negative effects on diamond sales as a result of the current Zimbabwean issue. The release of the blockbuster Blood Diamonds movie in 2006 starring Leonardo DiCaprio posed a considerably greater risk to diamond sales however this risk did not come to fruition due to a concerted industry effort to effectively disseminate a clear message about the positive steps taken to stamp out non-ethical diamonds on the one hand and the beneficiation created by the diamond industry on the other. Even in the immediate term we do not foresee any significant effect on the industry as a whole and more specifically on investment diamond prices. In fact we expect current economic market forces such as demand outstripping supply to be the major driver of investment diamond prices. Notwithstanding this, the re-emergence of the topic of non-ethical diamonds in the public domain consolidates its position as the major risk facing investment diamond market and in being so needs to be managed appropriately by all interested parties.
Saul Singer is a principal at Fusion Alternatives, an innovative investment house and the leading alternative investment asset manager specialising in investment diamonds. Visit www.fusionalternatives.com for further information.View Full Article
Investment Diamond Prices Continue to Rise
Posted: 10 Jun 2010 | Author: admin
Prices for investment diamonds continued their upward price movement during May rising a further five percent marking the fifth consecutive month of price gains. Since the beginning of the year prices have increased 15 percent. The encouraging aspect of the price rise is that it is now being more driven by solid pull-through demand from the world’s major diamond consuming markets as opposed to the lack of inventory in the diamond pipeline caused by the major producers reducing their output as was the case earlier in the year.
Inter-dealer market sentiment remains upbeat in the wake good trading activity at this week’s all-important trade show in Las Vegas. The telling positive indicator arising from the trade show is that buyers have clearly accepted the higher asking prices and are now actively buying at these higher prices. Being the year’s largest and most important trade show, the Las Vegas trade show is the traditional benchmark for the state of the diamond and jewelry industry with the trade activity at the show generally depicting the expected sentiment of the wholesale market for the second half of the year.
At the upper end of the market prices remain extremely strong as evidenced by the prices fetched at the Christie’s jewel sale in Hong Kong at the beginning of the month. 89 percent of the lots on offer were sold generating $60.4 million in sales. Seven diamond items were sold for more than $1m each including a pair of fancy deep blue heart-shaped and large white pear shaped diamond earrings which sold for $4.4m and a brilliant 13.67 carat E color internally flawless diamond which sold for $1.74 million.
Notwithstanding the overall buoyant sentiment of polished diamond market we are witnessing the re-emergence of some speculative trading activity, albeit at limited and sustainable levels. We are keeping our eyes on this week’s De Beers’ DTC sight in London to ascertain the effect the rise in demand and prices for polished goods will have upstream on the rough diamond markets.
Saul Singer is a principal at Fusion Alternatives an innovative investment house and the leading alternative investment asset manager specialising in investment diamonds. Visit www.fusionalternatives.com for further information.View Full Article
Gold price hits new record as it breaks through $1,250
Posted: 9 Jun 2010 | Author: admin
Daily Telegraph - The price of gold rose to an all-time high point above $1,250 an ounce on Tuesday, as investors nervous about the weak state of the global economy sought safety in the precious metal.
At about 09.25 GMT on the London Bullion Market, gold hit a record $1,251.85 an ounce.
“Gold rallied to a new all-time high this morning as worried investors continue to pile in to the precious metal,” said Rajesh Patel, head trader at financial betting firm Spread Co.
“We are seeing continued signs of stress in the financial markets and investors, novice to expert are looking at gold now as a hedge against further turmoil.” Gold is viewed as a safe-haven investment in times of economic trouble.
US gold futures for August delivery hit a record high $1,254.50, and were later up $10 at $1,250.80. The precious metal also hit record highs in euro, sterling and Swiss franc terms.
Investors’ concern that loose monetary policy will unleash inflation is among the factors prompting interest in tangible assets such as gold.
Jeremy Charlesworth, manager of the Moonraker Commodities fund, said: “If you mass produce something then it will lose value at some stage. Quantitative easing is undermining the value of Western currencies and assets.
“Yet the European Union has decided that the solution to the debt crisis is even more debt and confidence in the recovery package has now evaporated. When people abandon bonds and Western currencies they will look for real assets, which can’t be created at the touch of a button. The gold market really does have the bit between its teeth at the moment.”
Not everyone shares this bullish view, however. Robert Prechter, the president of Elliott Wave International, who is known for forecasting a big bull market in stocks in 1982 and for getting out before the 1987 stock market crash, told the Reuters Investment Outlook Summit in New York that the gold price could drop by 40pc because of bearish technical momentum and deflation amid a European debt crisis.
“The time to get excited about gold was back in 2001 when no one wanted it,” he said. “And now everyone seems to want it, so I don’t.”View Full Article
Posted: 31 May 2010 | Author: Adam
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DIAMOND PRICES CONTINUE TO RISE AS DOES SPECULATIVE TRADING ACTIVITY
Posted: 24 May 2010 | Author: Saul
TRADING NOTES: Positive market sentiment continues with solid trading activity and good demand. Polished prices continue their upward momentum with more buyers now accepting higher price levels. We caution the re-emergence of speculative trading activity in the 2-4 carat size ranges although this seems to be contained at the moment. Robust demand from the U.S. market for 1-2 carat, G-H color, VS-SI clarity goods which is supporting higher prices in these categories and no sign and pull-back in demand from Chinese and Asian markets. Volatility in rough diamond markets continues with major suppliers now stepping in and actively attempting to keep rising rough prices aligned with overall market realities. Although this has sent a message to the market, to date rough prices continue to climb amidst speculative trading activity.
We expect prices for investment diamonds to continue to rise into the near term supported by solid demand, flat production growth levels and a more buoyant macro-economic environment. Prices are still well below the levels reached in 2009 and thus have considerable upside potential before the realignment of the demand and supply curves. At the ultra-high-end of the market some special pieces are going to auction over the next few weeks which will give some indication of market sentiment and whether the record prices attained during last year will continue.
MARKET NEWS: De Beers’ April sight estimated at $470 million with a reported 5-7 percent price increase. Indian polished diamond exports in april reach $1.94 billion, an increase of 109 percent on April 2009. US polished diamond imports during March reaches $1.55 billion, an increase of 85 percent on March 2009. Sotheby’s sells a 7.64 carat, cushion-shaped fancy intense blue diamond sells for $8 million at Geneva auction. US Consumer Price Index (CPI) for jewelry rose 2.2 percent in April and US overall e-commerce sales increase 10 percent in Q1. Gold price soars to record levels on the back of financial uncertainty in Europe.
Investment Diamonds vs. other assets
(Index Jan 2008 = 100)
Fusion Alternatives is a unique boutique diamond investment advisory and trading firm offering its clients discrete and professional diamond investment services.
For further information about investment-grade diamonds contact Saul Singer on +44-(0)208-183-0244 or firstname.lastname@example.orgView Full Article
De Beers says diamonds running low
Posted: 4 May 2010 | Author: admin
De Beers has made the decision to reduce production in an attempt to extend the life of its mines, according to a report in The Financial Times.
The prediction by De Beers is based on two factors: rising Asian demand has accelerated the depletion of the world’s diamond mines; and more diamond mines are reaching the end of their production life than new diamond discoveries and mines are coming on line.
De Beers will cut production to 40 million carats per year from 2011. In 2008 the company produced 48 million carats.
In the news report, De Beers managing director Gareth Penny posed the question: “Do we want to ramp production back up to 48 million carats, given the lack of availability in the future?
“Diamonds are a treasure of nature that should be properly protected, because there will be less to sell. The reality is that supply cannot keep up, and that will become very accentuated over the next 15 years,” he said.
De Beers accounts for 40 per cent of global rough diamond sales.
The company recorded a net loss for 2009, although it stands to gain over the next five years from what Penny called “a natural supply-demand imbalance”.
Australian diamond expert Garry Holloway, director of Holloway Diamonds, said of the decision: “It’s likely to accelerate the rise in the price of diamonds.”
According to Holloway, the move by De Beers is simply a clever marketing strategy designed to ensure it achieves higher prices for its diamonds.
“When there’s a downturn in the market, De Beers has traditionally withheld diamonds from the market until the price goes up,” he said.
Despite the price rise, he said the move was a good sign, signalling De Beers expected the diamond market to strengthen in the near future.
“This is a ‘good times’ strategy,” Holloway said.
“De Beers is saying that demand from America and Asia will be stronger in three years than it is now.
“So if demand is going to go up, why not keep your diamonds in the ground and bring them up when demand is peaking?
“It makes sense,” he said.
Reports suggest De Beers plans to become a publicly listed company next year, and that the recent decision might be designed to make the company a more attractive investment.View Full Article
Diamond Prices Strong at New York Auctions
Posted: 4 May 2010 | Author: Adam
Rapaport - Diamonds, jewelry and colored stones all sold for solidly strong prices at Sotheby’s and Christie’s New York sales earlier this week. Diamonds 10-carats and over sold extremely well with very strong prices, particularly for those of higher qualities. The shortage of these larger diamonds has driven prices higher as privates and dealers scramble to get their hands on big rocks, which appear to be increasingly difficult to find. Most diamonds under 10-carats found homes some going for surprisingly high prices, while others were more reasonably priced.
Sotheby’s two part sale tallied $39,608.676,. The morning session Always in Style, a single owner collection of 233 lots accounted for $4,946,338 and sold 87.1 percent by lot and 90.5 percent by dollar value. Part two of the sale, Magnificent Jewels, with afternoon and evening sessions totaled $34,662,338 for 332 lots and was sold 83.7 percent by lot and 91.7 percent by value. The presale estimate for the two sales combined was $35.3 million.
The top lot of the sale was a 100.17-carat fancy vivid yellow diamond necklace, with 42 Gemological Institute of America certified stones. The necklace sold for $3,554,500 to an Asian private.
Over at Christie’s, two-days later, the 297 lot sale garnered $41,246,325 and was sold 85 percent by lot and 92 percent by dollar value against a presale estimate of $25 million. It is notable that all top 10 lots of this sale were more than $1 million and eight of those 10 lots were diamonds.
The top lot of this sale was a 28.28-carat D/IF heart shaped diamond pendant suspended from a kite shape diamond with three micro pave diamond discs above it. The pendant sold for $3,778,500, or $133,000, per carat, against a $3 million estimate to an Asian private.View Full Article
Sterling gold price hits new high
Posted: 4 May 2010 | Author: Adam
Telegraph.co.uk. -The gold price has hit a new all-time high in sterling terms as concerns about a hung parliament in Britain.
The gold price has hit a new all-time high in sterling terms as concerns about a hung parliament in Britain and the debt crisis in Greece weighed on the pound.
Gold hit £773 an ounce last week, a rise of around 25pc over the past year. Bullion also surged in dollar terms too, hitting $1,181/oz on safe haven demand.
There has now been little let-up in demand for gold since the start of the year.
Juan Carlos Artigas of the World Gold Council said the recent gold price increase was achieved despite strong performance from the US dollar and stock markets, even though it is often assumed that there is a negative correlation between the gold price and equities.
He said: “What becomes clear is that gold’s continuing upward price trend is anchored in solid fundamentals.”
Gold has a history of doing particularly well in the UK in election years and some investors are buying it as insurance against the volatility that would be caused by a hung parliament. The metal has performed more solidly than equities in the last decade. While the FTSE 100 remains below its level of 10 years ago, the sterling price of gold has soared by more than 320pc.
Demand from investors recently overtook demand for gold jewellery for the first time since 1980, thanks in part to investors getting exposure to gold through exchange-traded funds, which allow investors to bet on the price of commodities without owning them outright.
Record low interest rates have also resulted in British investors looking at alternative ways of getting a return on their money.
With the Retail Prices Index rising at 4.4pc in the year to March and the Bank Rate frozen at 0.5pc – and many bank accounts paying less than that – cash savers have lost nearly 4p in the pound during the last year in terms of reduced purchasing power.View Full Article