Retail sales in the U.S. will drive the world diamond market this year, as Japan and the rest of Asia will likely remain off the fast-growth track. Here are some other diamond trends:

  • Consumer confidence and trade confidence are expected to hold up, say De Beers marketers.

  • De Beers will continue to press the case for better-quality diamonds in a $200 million ad campaign.

  • The Solitaire campaign will continue into its second year.

  • Executives of De Beers’ Central Selling Organization say 1997 will be another year of “controlled allocations,” meaning supplies of better qualities will continue to be scarce, with prices slowly rising.

  • Delays on a De Beers-Russian agreement probably will continue because of Russia’s political uncertainties and the legal problems of Almazy-Rossii-Sakha, the agency that mines and markets Russian diamonds. Even if an agreement is signed, some Russian leakage of goods by joint ventures is likely to continue, though De Beers still believes a formal pact would rein in most of them. (Russian joint ventures continued to sell rough into the market in a big way through the end of 1996.)

  • Angola’s loss of control over its diamond production is likely to continue. Most of the country’s productive diamond fields have been commandeered by rebel forces loyal to the government-opposition group UNITA. More than $700 million worth of diamonds – most of them better qualities – have poured out of the country already. Rebel leader Jonas Savimbi refused to remove his troops from Cuango, a prime diamond-producing area.

  • Small-diamond prices and profits will remain uncertain as De Beers and Argyle adapt to their post-divorce relationship. If either breaks its word to remain responsible players, prices of smaller diamond could be driven downward.


The trend toward warm, earthy colors complementing the colors of women’s clothing is likely to continue, with peridot and garnet in the lead. Other warmer gems also will be popular. Here’s a prediction of hot-sellers:

  • Peridot. Expect this green gem to be as popular this year as last. Tight supplies from China and Pakistan should keep prices competitive, say dealers such as Bill Barker of Barker & Co., Scottsdale, Ariz. Some dealers are cautious. Shomais Sabouri of Gem 2000, Columbus, Ohio, believes peridot sales will remain steady, but won’t sizzle.

  • Garnet. Garnets of all colors will continue to grow in popularity, from bright orange mandarins from Namibia and raspberry and plum rhodolites from East Africa and India to yellow or bright orange stones from Mali, Pakistan and India. Pakistani “Kashmirine™” garnets have outstanding color, says Susan Ruedisili of Ruedisili Inc., Sylvania, Ohio. Expect to see more color-change garnets, which may become less rare due to a new find in Sri Lanka and greater supplies from the Tunduru region of Tanzania.

  • Imperial topaz. This stone is sought-after, but supplies from Ouro Preto, Brazil, are erratic at best. Prices for the finer goods have escalated dramatically. Coffee-colored zircon may be an alternative, as well as some finer smoky citrine and ametrine quartzes.

  • Chrysoberyl. This stone in green to yellow is poised for a comeback, says dealer John Bachman of Boulder, Colo. Production is at an all-time high, with gems originating in Tunduru and Sri Lanka. Prices fluctuate considerably – $20 per carat is not uncommon for gems over 4 carats. Alexandrites also are being seen again, thanks to new production from Russia’s Ural Mountains and new finds in Africa and Brazil.

  • North American riches. Watch for U.S. sapphires: producers say they will be strong in 1997. Also to watch are ammolite from Canada, fire agate from Mexico and Arizona and sunstone from Oregon.

  • Myanmar’s bounty. Expect more of Myanmar’s stones on the market in 1997 because of the country’s new economic openness. Also look for strong sales of small calibrated spinel in lavenders and pinks to saturated reds. The small stones are being aimed at mass-market jewelry because of their uniform color and reasonable prices. Large lavender spinels, however, can sell for $180 to $250 per carat and flame red spinels for more than $1,000 per carat in sizes over 4 carats. Spinel’s strength is due in part to the fact it’s not subjected to hard-to-identify treatments.

  • Ruby. Don’t forget ruby, says the International Colored Gemstone Association. ICA is betting on another hot year for the red stone after a full year of promotion in 1996.

  • Tourmaline and tanzanite. No, they’re not earth tones, but ICA reminds us that tourmalines in the green-to-blue range and tanzanite complement the warmer colors and could be used in combination with them. Tanzanite continues to enjoy steady demand, especially for larger sizes and saturated colors, selling for $350 to $400 per carat. Medium to light colors have experienced price drops to as low as $100 to $125 per carat.


Anyone who was anyone wore pearls in 1996, the year of the whirlwind Jackie O auction and Liz Taylor’s well-publicized scent Black Pearls. From real-world political wives Hillary Rodham Clinton and Elizabeth Dole to the spurned women in the film First Wives Club to Carolyn Bessette Kennedy, JFK Jr.’s new bride, pearls were everywhere. This trend should continue into 1997. “It’s a good time to be in the pearl business,” says Armand Asher of Albert Asher South Sea Pearl Co., New York City. Here’s a look at how the supply will meet the demand:

  • Supply: High mortality rates among oysters may mean a much smaller crop of Japanese akoyas in 1997 and a short supply in the 7mm to 9mm ranges. The Japanese also reduced production in the 6mm to 61&Mac218;2mm range because of competition from the Chinese, who can offer these sizes at about half the price. Strained supply could ultimately mean higher prices. Chinese akoyas are abundant because they are harvested so quickly, sometimes in a matter of months.
    Quality improvements in the 6mm to 61&Mac218;2mm range should continue. Australian white South Sea pearls have increased in supply, though not as much in over-16mm goods. Prices have remained stable or dipped only slightly because of great demand. South Sea pearls may be harder to come by in 1997 because of accusations that some dealers are monopolizing the market and because of high demand in Hong Kong. “These factors are driving prices up and the U.S. market cannot accept the higher prices,” says Avi Raz of A&Z Pearls, Los Angeles. Tahitian black pearls are experiencing drops in supply despite a large number of farms in French Polynesia, because many of the pearls are very low quality, says Asher. Also Americans are competing for supply with Japan, the world’s largest buyer of black pearls. Prices have risen an average of 8% because of high demand, according to G.I.E. Perles de Tahiti, an international marketing organization. The group expects prices to reach peak prices of $45.58 per gram in 1997. Currently, however, prices remain reasonable.

  • Demand: Demand should rise because jewelers are sitting on low inventories, says Raz. The boom in coverage of pearls in magazines, movies and ad campaigns will help to fuel sales, as will a stronger dollar against the yen. “Pearls cost about 20% less than they did a year ago,” says Raymond Mastoloni Sr. of Frank Mastoloni Sons Inc., New York City. Chinese akoyas will be popular with chain-store buyers, whose customers want commercial-quality pearls at lower prices. Demand for South Sea white pearls and Tahitian black pearls will skyrocket thanks to multimillion dollar ad campaigns by the South Seas Pearl Consortium, the Tahitian Pearl Association, Elizabeth Taylor’s Black Pearls perfume campaign and Tiffany & Co.’s promotion of its trademark gray pearls.

  • Fashion: Frilly chiffon and see-through materials will look new this spring, calling to mind the 1920s. “Pearls were a big part of the ’20s fashion, so we’re seeing this as an indication they will remain in style,” says Devin Macnow, executive director of the Cultured Pearl Information Center, New York City. Look for pearls to continue in business and political settings. The Pearl Society, Evanston, Ill., wonders if political wives are wearing pearls because they traditionally have symbolized purity and virginity and, thus, are part of the “family value” movement. Indeed, women are wearing pearls to symbolize their trustworthiness and respectfulness. Dr. Helen Caldicott, a pearl-bedecked activist, recently joked in a New York Times article that she was thinking of naming her book If You Wear Pearls, You Can Say Anything.

  • Jewelry Design: Designers will use pearls in unusual ways. Many will lean toward off-color pearls, including Tahitians in a variety of shades. Some will continue to experiment with a combination of colors, sizes and shapes. Interesting baroque pearls will remain popular, as will mixes of pearls with precious metals. Multi-strands in all lengths will stay hot.

  • Promotion: The Cultured Pearl Information Center will introduce a new educational film for retailers to teach sales staffs about pearl products and how to sell them. It also plans a spring ad campaign in Elle, Vogue, Vanity Fair, Town & Country and possibly Self.

  • The Tahitian Pearl Association, the U.S. arm of G.I.E. Perles de Tahiti, had such success with its 1996 promotions – including cooperative advertising, an educational package and a black-tie ball – that its promotion budget is expected increase to $1.3 million. With that money, TPA will increase its consumer and trade advertising. In the meantime, TPA has helped to organize the filming of a PBS documentary on Tahitian black pearls.

  • The South Seas Pearl Consortium’s “stud promotion” will ask superstars in sports and entertainment to wear cultured pearl studs in public. SSPC also will team up with Tiffany & Co. to hold an Australian South Seas Pearl Ball sometime this spring in New York City.

  • Education: TPA will contribute $300,000-$500,000 to the Gemological Institute of America for its pearl course. The money, along with a donation of $600,000 by the South Seas Pearl Consortium, will be used to add sections to the course and expand it to two months. SSPC works closely with GIA to research how to distinguish dyed pearls from Australia and Indonesia from naturally colored ones. They hope to start issuing certificates verifying legitimate color in a matter of months.


The Russian Committee for Precious Metals and Gems has won a negotiated settlement of $165 million from Golden ADA of San Francisco following a lengthy court battle.

The committee charged that former Golden ADA owners misappropriated nearly $90 million worth of rough diamonds and nearly the same amount in polished diamonds and gold – all obtained from Russia’s stockpiles.

Rajiv Gosain, Golden ADA’s current owner, issued a statement saying the company’s assets will be placed in a trust. The trust will sell all Golden ADA holdings to pay the committee and to pay $60 million the IRS says the company owes in back taxes. Gosain and the committee dispute the amount of tax owed. That matter remains under litigation.

Gosain bought Golden ADA from the founders, Russian emigres David and Ashot Shagirian, in September 1995. The committee subsequently filed suit in U.S. District Court in San Francisco, saying the Shagirians received rough diamonds from Russia’s large stockpile to establish a diamond polishing factory. The brothers were reportedly close to the former chairman of the committee, Evgeny Bytchkov, who administered the diamond and gold stockpiles. Bytchkov also was the subject of a long investigation by Russian officials.

In early 1994, the company imported $88 million worth of rough from Russia and hired a number of well-connected San Francisco politicos to administer the company’s operations. The company never did reach its stated goal of becoming a prime source of high quality Russian polished diamonds.

After a series of management changes following the Shagirians’ withdrawal from day-to-day operations, Russian authorities demanded payment for the diamonds and gold the founders had acquired. In addition, the IRS moved in to collect the unpaid taxes.

Gosain bought the company’s assets in September 1995 (he had no part in the company’s operation before that). As part of the settlement, he will work as a consultant to recover Golden ADA’s assets. “The Russian Committee intends to vigorously pursue Golden ADA’s assets globally,” says Gosain. Currently, he is tracking down reports the Shagirians sold the rough diamonds in Antwerp. Golden ADA reportedly has assets elsewhere in the U.S., Antwerp and Eastern Europe, including Russia.

Gosain says Golden ADA is not operating as a jewelry business any more, but that its real estate arm is doing quite well. “After we reconcile our case with the IRS, we’ll look at our plans for reentering the jewelry business,” he says. “Of course a lot depends upon the state of Russian politics, but they do want direct access to the U.S. market and know we can provide that.”

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