The Arcane World of High Priced Gems

by Richard W. Wise

© 2008

“I am showing you this in absolute confidence, you understand Mr. Wise and I am asking you please not to mention this stone to anyone”.

So begins a conversation not unlike many similar conversations I have had over the past few years with dealers who specialize in ultra-rare and very high priced gemstones. The place, Las Vegas 08, the gem an extraordinary, ultra-rare fancy color diamond, the price, somewhere north of 10 million dollars.

Ultra-high-end gemstones exist, are bought and sold in their own world or rather in two contradictory worlds. Remember the Star Trek episode. The Enterprise discovers a new universe that is the flip side of our own, its just the same only everything is backwards. Sound familiar? (pictured above 6.04 carat Fancy vivid blue, internally flawless. Sold: Sotheby's Hong Kong, U.S. $7,981,835.00 world record: 1.3 Million per carat)

Baubles, Bangles and Glitz:

First there is the glitzy universe or world of the auction houses which has become increasingly the venue where the ultra-fine and ultra-rare and therefore ultra-chic are sold and lately a world record price shattered at every auction.

“Ego is out there, these people want to be seen and the item and purchase price are very public.” says Gloria Lieberman, head of the jewelry department at Skinner’s Boston where the dealer/retail buyer mix is currently 60/40. The dealers still bring in more dollars, but the auction houses see the handwriting on the wall. They are directing more and more of their marketing toward consumers. The auction market is becoming increasingly a retail venue.

Burning the Stone; Mum’s the Word:

Then there is the universe of the old-line, high end dealers where discretion is the watch word. Picture richly paneled walls, men in conservative well cut suits floating down silent hallways. The reality may be the rabbit-warren at 580 5th Avenue but, hey, lets maintain the illusion.

“At all costs they avoid burning the stone”, says a prominent dealer, “If the price, even the fact of the stone’s existence becomes too public, some buyers will shy away”. This is known in the trade as burning.

This dealer cites the example of the 76.45 carat Archduke Diamond named for the Austrian Arch Duke Joseph August. Molina a high-end Phoenix Jeweler, made a very public show of owning the stone even allowing singer Celine Dion to wear the Archduke on a TV special. In the dealer's world, this is very bad form. One dealer who was interested in the stone for a client declined to show it once he found out about all the hype surrounding the gem. “Our clients wouldn’t be interested.” The stone had been burned.

Auction prices are “an indication not a guideline of a gem’s value” says Marc Lazar a dealer with a mind boggling inventory of ultra-fine white and fancy color diamonds who has, in the past,bought and sold diamonds at auction. “You have to know the details. Who was the buyer”? asks Lazar. Was it a dealer or a retail buyer with a lot of money who didn’t mind paying a high price. Conversely, warns Lazar, a stone may sell for a low price at auction.

Why would a dealer pay a high price on purpose? As part of a strategy to ratchet up the value of other similar gems he already holds in inventory.

One source has suggested that this is exactly what happened with the record ruby sale in 2006. An 8.67 carat “pigeon’s blood" ruby that sold for $425,000 per carat shattering the world’s record per carat price established just the year before when a 8.01 carat of similar color went for $275,00 per carat to a private Asian buyer. (image above left). Lawrence Graff, perhaps the world's most prominent dealer, bought the second stone. According to my source, he didn’t mind paying the highest price ever paid for a natural ruby because he had several more rubies of similar size in his inventory and a rising market raises all boats (more). The stone has since been reset and modestly renamed The Graff Ruby.

Obviously this sort of wheeling and dealing is not a method you should try at home. As Marc Lazar points out: You must know the market, know the gem, be at the auction and know to whom it sells. Only then are you in a position to decide if the new world's record price is a true indication of the gem's market value.

Tanzanian Spessartite: A New Kid on the Block:

Bored with million dollar gems? In my last postI suggested that the fine Nigerian spessartite was becoming scarce and that prices were rising. A new production of spessartite from Tanzania came on line just last year. As to the color, you be the judge. To my eye the yellow secondary hue is stronger thus diluting the orange making the general run of material from this new source inferior to the best from Nigeria but the two pictured here are certainly worth a second look. The yellow secondary hue being brighter---yellow is the brightest hue---you get a punchy saturation. Much of this new production has eye-visible inclusions, but you will never get run over in a cross-walk wearing one of these beauties. Compare these to the two images in last week's post. and you will see what I am talking about. The good news is, a fine spessartite garnet can be obtained for hundreds per carat not thousand or millions and frankly a fine spessartite will blow the doors off of most fancy color orange diamonds at a fraction of the price.. (5.75 square cushion, 9.4 mm square. 2.26 hexagon, 7.12 x 8.04 mm courtesy GemNut:)

Stay tuned, click on my rss feed (the neat little widget, top left) or sign up to receive GemWise by email.

Interested in learning more about the connoisseurship of fine gemstones? Read the book that appraisers, dealers and jewelers rely upon. Secrets of The Gem Trade will provide you with the tools you need to understand and appreciate fine gemstones. Learn the true grading criteria for diamonds, pearls, garnets, ruby, sapphire and opal. All of today's most "precious gemstones". Read a free chapter online at the Secrets website: or just order it for $35.95 from Amazon.com:

whether you like to know what the best colour is in Tanzanite, or how to grade a Diamond, you will find it in this book. No other book I read before dealt with this topic is such detail as Richard Wise's masterpiece."

A. Van Acker, FGA
Amazon June 2005

Crisis In Paradise; Pearl Prices in Tailspin

Had an interesting conversation with Josh Humbert, Josh is the proprietor of the Kamoka Pearl Farm in the Tuamotu Islands www.kamokapearls.com , a far-flung windswept archipelago about 300 miles north of the capital island of Tahiti.

Josh’s farm is located on the atoll of Ahe located 350 miles north east of Tahiti in the Tuamotu Islands. Unlike Tahiti, which is a volcanic island, the Tuamotus are true atolls, flat ribbons of coral surrounding a large center lagoon. Conditions in this far off island group are perfect for the culturing of the Pinctada Margaritifera, the parent mollusk of the black pearl.

20% Price Drop in Small Sizes:

According to Josh, all is not well in paradise. Once more, over production has led to a crash in pearl prices at the source and many farms are in financial trouble. You may remember a similar crash in pearl prices about five or six years ago. The last time we were able to offer fine black pearl strands at bargain prices and consumers lapped them up.

Another exceptionally knowledgeable source tells me that the oversupply is mainly in the smaller 8-10mm sizes, pearls in the 11mm+ range are hard to come by and prices are actually higher. At the March GIE auction in Papeete asking prices were high and very little sold. Most lots sold privately, post auction, at prices much lower than the advertised floor prices allowing GIE to claim a successful sale. Pearls in the 8-9 and 9-10mm sizes have dropped approximately 20%.

Don’t expect to see these falling prices right away. Prices at the Las Vegas Gem Shows should reflect the prices on older stock. Unless there is a rebound, these price cuts should trickle down by this fall. Stay tuned...

Book Review

By Richard W. Wise, G.G.

©2008

Gems & Mines of Mogok

by Ted Themelis

Hardcover 352 pages

Self published 2007

For gem enthusiasts, Mogôk is the Holy Grail. This beautiful remote valley together with Afghanistan’s Sar al Sang, is the oldest continuously productive gem district on earth. If there is anything you didn’t know about the gems or geology of Mogôk that was not covered in his previous volume, Ted Themelis’ new book "Gems & Mines of Mogok" has got you covered.

Themelis’ previous book Mogôk, Valley of Rubies and Sapphires published in 2000 focused on the history, people and as the title suggests the fabulous ruby and sapphire produced in the valley. In this new book Themelis turns his attention to the Geology, Mineralogy, Crystallography and mining of the diverse gemstones and minerals found in the Mogok Valley. The book is profusely illustrated with charts and maps of tectonic models and geological models, satellite images together with topographic and geological maps.

Themelis starts right off in Chapter 1 with a comprehensive historical overview of the geology of Mogok replete with a proposed model of the tectonic evolution of the region accompanied by an imposing array of illustrations: a Timetable of Rocks and a two page color Geological map of Mogok, photographs of geological features and rocks divided by type; igneous, pegmatitic, metamorphic. In short, a geologist’s compendium coupled with a rock hound’s field guide to the region.

Most books in this category focus on ruby and sapphire, skipping lightly over the many rare and interesting gems and minerals produced in this complex geological environment. In Chapter 5, Themelis profiles and provides photographs of some sixty gem species and varieties, everything from amblygonite to zircon. In appendix D he provides a handy gemological property chart of the twenty-one most important gemstones complete with refractive index and other key identification criteria. (above right: 8513: 2.09 Natural Mogok Burmese Ruby from the R. W. Wise Collection)

There is something for everyone: For the lab gemologist, photomicrographs of inclusions and descriptions of ruby, sapphire and peridot; for the mineral collector, descriptions and images of a large number of mineral specimens by sub-regions; for the ruby-sapphire aficionado an illustrated discussion of origin determination; for the crystallographer a images and illustrations of crystal habits. Appendices cover treatments of Mogok ruby and sapphire, Burmese gem-jargon, a list of gem mines with latitude-longitude followed by a nine page bibliography.

The book is an awesome, genuine tour de force, buy it! Better still, buy both volumes for $199 and Themelis will throw in a free CD. www.themelis.com . For immediate delivery in the U. S. contact: Mr. Bill Dunn at Hypatiagem@aol.com

Take a boat ride across an exotic lagoon. Visit a black pearl farm and learn how black pearls are farmed and graded.

Follow me on gem buying adventures in the pearl farms of Tahiti. Visit the gem fields of Australia and Brazil. 120 carefully selected photographs showing examples of the highest quality gems to educate the eye, including the Rockefeller Sapphire and many more of the world's most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur's Guide To Precious Gemstones.

“Wise is a renowned author... He’s
done a marvelous job of this first book, monumental work, a tour de force...My recommendation: Buy this book”.

Charles Lewton-Brain, Orchid

whether you like to know what the best colour is in Tanzanite, or how to grade a Diamond, you will find it in this book. No other book I read before dealt with this topic is such detail as Richard Wise's masterpiece."

A. Van Acker, FGA
Amazon June 2005

"Secrets Of The Gem Trade: The Connoisseurs Guide To Precious Gemstones by Richard W. Wise is an impressive new reference for dedicated dealers and collectors of gems, gemstones, and ... pearls. Introducing and descriptively exploring each and every gem covered in the easy-to-use reference, Secrets Of The Gem Trade contains an illustrated summary of each stone inclusive of its history and general information, hue and tone, saturation, which may be noticed as the finest, an understanding of the particular gems rarity, and the caution for synthetics and how to depict them, however depending upon the stone there may be description of clarity, color fading, multi-color effect, etc. Secrets Of The Gem Trade is very highly recommended to anyone interested in gemology as a superbly organized, authoritative, comprehensive, and easy-to-follow reference."

Midwest Book Review
April 2006

Only $35.95. Read a couple of chapters online: www.secretsofthegemtrade.com.

Buy it on Amazon: www.amazon.com

"Asking to see the Pigeon's blood is like asking to see the face of God"

About once a month on one of the gem forums someone asks the question:

"What color is pigeon's blood."

by Richard W. Wise, G.G.

©2007

The real question is, of course, "what is the best color in ruby." Although I cover the question in some depth in my book; Secrets of The Gem Trade, The Connoisseur's Guide to Precious Gemstones, it appears that a few people have yet to read the book. (pictured above a gem quality 2.09 carat natural old mine Burma ruby with a GRS "pigeon's blood certificate)

The short answer is simply that rubies should be red. Problem is there are almost no visually pure color in nature so, we speak of a mixture of colors. In gems, we normally speak of a primary and a secondary color or hue. Gems may have more than two hues but it it is difficult for even the most discerning connoisseur to see more than two. Still a ruby must be predominantly red, that is, have a primary red hue. Put another way in the color mix, red must be at least 51% of the hue mixture. If its not red its not a ruby. Any member of the gem family corundum that is any color other than red we call sapphire.

Ruby may exhibit one of a few possible secondary hues. These are: pink, purple and orange. Purple and orange are the hues immediately adjacent to red on the color wheel. You will never find a ruby with a green secondary hue. Pink, a paler less saturated red is also possible. The finest color or pigeon's blood exhibits a purple secondary hue. Why purple, there are two good reasons; one historical and the other based upon color science.

This historical explanation I owe to Vincent Pardieu. Vincent began by studying gemology in Burma and he found a dealer who explained "pigeon blood" to him. The Burmese coined the term. Purple is a hue that falls between blue and red on the color wheel. It is known scientifically as a modified spectral hue. The Burmese set gems in pure gold which is a a very rich yellow color. Blue is the compliment of red. Complimentary colors are those that cancel each other out. So when a purplish red ruby is set in yellow, the yellow of the metal cancels out the blue in the purple leaving behind, guess what an almost visually pure red.(pictured above a 1.63 carat gem quality old mine Burma ruby with a GRS "pigeon's blood certificate). So the goal for the Burmese is red, pure red! See more!

I wrote my book several years before I met Vincent in Bangkok. However, I reached the same conclusion by applying a logical analysis. My reasoning goes something like this. Color Science teaches that the color red reaches its optimum saturation (brightness) at a fairly dark tone, somewhere about 80%. This is not opinion, it is measurable scientific fact. If you consider that 100% tone would be pure black, 80% is pretty dark. Pink and orange on the other hand reach their optimum saturation at fairly light tones. Pink obviously as it is by definition paler (less bright). Orange reaches its optimum saturation at between 30-40% tone.

Purple reaches its optimum saturation at around 60% tone. Now, if you add a light pigment to a dark paint you would obviously lighten the overall effect. Same is true in transparent media. The optimum tones of red and purple mix fairly well both being both dark in tone. The purple unlike the pink does not dilute the red. Pink and orange would lighten the red thus reducing the overall saturation of the pinkish-red or orangy-red color. Purple reinforces the red, orange and pink dilute. Make sense? Not everyone agrees. Some connoisseurs like a bit or orange. They feel it frames and pumps up the red hue. A good point if you consider the effect of orange in red spinel. Be that as it may, for good historical as well as scientifically verifiable reasons, orangy red is not pigeon's blood.

The first image above is of a 2.09 carat Burmese natural ruby from the old min at Mogok. This stone has a bit purer red, exhibits less purple than the second stone, a 1.63 carat gem from the same mining area. Both, however, have been grading "Pigeon's blood" by GRS, Swiss Lab, Bangkok. As you might imagine this lab sees an awful lot of rubies. Both stones are from the Mogok Valley, this is the place, going back to the Bronze Age, where the original stones were mined back when the term pigeon's blood was coined. A lot of the gems currently in the market are from a new mining areas Mong Hsu that is about half way between Mogok and the Thai border. Mong Hsu stones can certainly be pigeon's blood color but since we are talking about a historical term I thought it best to use illustrations from the old mine.

By the way if you are looking for the ultimate Christmas present, both these gems are available for sale.

Want to Learn more?

Follow me on gem buying adventures to the old Burma ruby mine at Mogok. Learn how to judge the quality of rubies, sapphires, emeralds, garnets and 31 other gems. 120 carefully selected photographs showing examples of the highest quality gems to educate the eye, including the Rockefeller Sapphire and many more of the world's most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur's Guide To Precious Gemstones.

“Wise is a renowned author... He’s
done a marvelous job of this first book, monumental work, a tour de force...My recommendation: Buy this book”.

Charles Lewton-Brain, Orchid

whether you like to know what the best colour is in Tanzanite, or how to grade a Diamond, you will find it in this book. No other book I read before dealt with this topic is such detail as Richard Wise's masterpiece."

A. Van Acker, FGA
Amazon June 2005

"Secrets Of The Gem Trade: The Connoisseurs Guide To Precious Gemstones by Richard W. Wise is an impressive new reference for dedicated dealers and collectors of gems, gemstones, and ... pearls. Introducing and descriptively exploring each and every gem covered in the easy-to-use reference, Secrets Of The Gem Trade contains an illustrated summary of each stone inclusive of its history and general information, hue and tone, saturation, which may be noticed as the finest, an understanding of the particular gems rarity, and the caution for synthetics and how to depict them, however depending upon the stone there may be description of clarity, color fading, multi-color effect, etc. Secrets Of The Gem Trade is very highly recommended to anyone interested in gemology as a superbly organized, authoritative, comprehensive, and easy-to-follow reference."

Midwest Book Review
April 2006

Now 20% off. Read a couple of chapters online or buy one of the few remaining limited editons: www.secretsofthegemtrade.com.

Buy it on Amazon: www.amazon.com

Hong Kong Gem & Jewelry Show 2007

Prices at the 2007 Hong Kong Show

by Richard W. Wise

©2007

Dateline Hong Kong.

This Thursday the Hong Kong Post reported that the U. S. dollar had reached a historic low against most major world currencies. Perhaps more important, the dollar which has been steadily losing ground against the Thai baht since its 2001 high, recently went into freefall. Historic data. Although the dollar along with the euro remains the international currency of choice, Bangkok is the capital of the colored gemstone trade and Thai dealers think in baht and the dollar has lost 19% against the Thai currency since the September 2006 show.

Ruby & Sapphire:

That said, prices of ruby and sapphire that were up dramatically in dollar terms at last year’s show ( read my 2006 report) have shown little upward movement. This is possibly the result of very poor sales at this September’s Bangkok show and would seem to indicate that Asian dealers are reluctant to pass along additional increases to a U. S. market currently viewed as on the edge of recession. The September Hong Kong show is one of the big three, the triumvirate of shows that sets future market prices. It will be interesting to see if dealer’s restraint will last until the all important Tucson shows in February particularly if the dollar continues to slide.

As usual, dealers report that supplies are down, particularly for high quality Burmese ruby and sapphire. This is the gem dealer’s eternal lament and one is tempted to ask; “yeah right, so what else is new” except that a new pro-democracy movement has apparently broken out in Burma with thousands of people taking to the streets in the country’s two major cities Burma news updates. This has got to have a negative effect on supply, short term. Will the brutal crackdown that is sure to follow lead to new economic sanctions or a boycott of Burmese goods in the U. S. is difficult to predict.

The gemstone business in Burma exists on two levels; on the one hand large scale mining is in the hands of the government. If you are doing large scale mining, you are in business with the army and much of the important material mined in large scale operations is marketed through the semi-annual government auctions. But, gem mining is mostly a cottage industry. At least 50% of the gems produced are from small scale mom and pop ventures that fall beneath the government’s radar and is smuggled out of the country. Having been on buying trips to Burma, it is my opinion that any new sanctions will probably backfire and impact the small scale subsistence miner more than the generals.

Stay tuned.

Interested in understanding more about the grading of fine diamond, pearl and othe gems? Follow me on gem buying adventures in the pearl farms of Tahiti. Visit the gem fields of Australia and Brazil. 120 carefully selected photographs showing examples of the highest quality gems to educate the eye, including the Rockefeller Sapphire and many more of the world's most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur's Guide To Precious Gemstones.

“Wise is a renowned author... He’s
done a marvelous job of this first book, monumental work, a tour de force...My recommendation: Buy this book”.

Charles Lewton-Brain, Orchid

Only $37.95. Read a couple of chapters online: www.secretsofthegemtrade.com.

Buy it on Amazon: www.amazon.com

Kashmir Sapphire Sets Record; A Victory for Style Over Substance?

A Victory of style over Substance?

April 25^th at Christies, in a packed auction gallery, lot 261 a cushion cut 22.66 carat Kashmir sapphire set in a pendant surrounded by diamonds sold for a world record price of $3,064,000 to an anonymous bidder. At $135,000 per carat, this sale topped the former world record held by the 66.02 carat “Rockefeller Sapphire” a Burmese gem that sold for $48,871 at auction in 1991. This sale marks the ascension of sapphires found on a rocky hillside in the Indian State of Kashmir into the pantheon of super-star gemstones.

Speaking in the wake of the sale, Christie’s Head of Jewelry, Rahul Kadakia, made the following rather curious statement:

“This auction marks a turning point in the jewelry world where original design, rarity and provenance prove to be just as important as the quality of a gem.”

What precisely did Mr. Kadakia mean? Is he celebrating the final triumph of style over substance? Does he mean that the sapphire in question though rare is not so fine? The record breaking sapphire pendant (above) is certainly not a striking example of original design.

According to Christopher Smith, Vice President & Chief Gemologist at The American Gemological Laboratory, the sapphire in question is a “nice stone”. Smith, who has seen the stone but under less than ideal circumstances, makes the point that sapphires of the finest color tend to be a bit dark particularly in subdued lighting. This stone is a bit lighter and brighter at about 70% tone on the AGL scale where 80% would be ideal. The stone is well proportioned, brilliant and on a scale of 1-10 would rate between 8-8.5.

As to the gem’s provenance, interesting though not remarkable, it was never owned by royalty nor lost on the field of battle nor has it had any remarkable stories or curses associated with it. It was purchased by James J. Hill, a Minnesota industrialist of the Gilded Age, and given to his wife, Mary, on Dec. 24, 1886. Originally part of an elaborate necklace—since broken up-- the sapphire remained in the Hill family until the death of Hill’s granddaughter Gertrude Boeckmann Follett, in 2006.

So what business does a nice sapphire like this have claiming a record price? Well though it may not be able to stand toe to toe with the former record holder, the 66 carat Rockefeller Sapphire (image:right), which is in Smith’s words “extraordinary” and one of the “world’s preeminent sapphires”, it is rare. Kashmir sapphires in excess of 20 carats are quite rare and if you own one it’s a seller’s market.

The fact is the finest of the Kashmir sapphire has been recognized as the top of the mark in sapphire almost since the stone’s discovery in the late 19^th Century. Celebrated for it’s cornflower blue color and its trademark sleepy quality, a gem with proven Kashmir provenance commands four times the price of a comparable Ceylon stone and twice the price of a comparable Burmese sapphire. Due to its beauty and rarity it was the next logical candidate for gemstone super-stardom.

Is this a “turning point”, a victory of style over substance, of provenance over quality in the gem markets? This much is obvious, just the price of natural Burmese ruby skyrocketed in the wake of the record breaking sale of the 8.01 carat gem at Christies just two years ago, Kashmir prices, already edging toward $100,000 per carat wholesale, will strengthen. Anything with a Kashmir certificate from gem quality to aquarium gravel will see a big boost in asking prices and the publicity will further induce star-struck consumers to choose geography first and quality second. But, this is not a new trend rather just a continuation of a trend that has been in evidence for quite some time.

Follow me on gem buying adventures in the exotic entrepots of Burma and East Africa. Visit the gem fields of Australia and Brazil. 120 carefully selected photographs showing examples of the highest quality gems to educate the eye, including the Rockefeller Sapphire and many more of the world's most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur's Guide To Precious Gemstones.

“Wise is a renowned author... He’s
done a marvelous job of this first book, monumental work, a tour de force...My recommendation: Buy this book”.

Charles Lewton-Brain, Orchid

Only $39.95. Read a couple of chapters online: www.secretsofthegemtrade.com.

Buy it on Amazon: www.amazon.com