Fall 1988 Gems & Gemology

FALL 1988 Volume 24 Number 3 TABLE OF CONTENTS EDITORIAL 133 Gemology Today Richard T. Liddicoat FEATURE 134 An Economic Review of the Past Decade in Diamonds ARTICLE William E. Boyajian NOTES 155 The Sapphires of Penglai, Hainan Island, China AND NEW Whg Furui TECHNIQUES , , 161 A Gem-Quality Iridescent Orthoamphibole from . I Wyoming R. V Dietrich, John Sampson White, Joseph E. Nelen, and Kwo-Ling Chyi Detection of Treatment in Two Unusual Green Diamonds Emmanuel Fritsch, fames E. Shigley, Carol M. Stockton, and fohn I. Koivula REGULAR Gem Trade Lab Notes FEATURES Gem News Gemological Abstracts Book Reviews Suggestions for Authors ABOUT THE COVER: There are many different aspects to the study of diamonds: books, instruments, grading devices, the stones themselves, and the jewelry into which they are set. One aspect that has become as important to the gemologist as the technical study of the gems is an understanding of the economics of the very con~plexdiamond industry. In the last decade in particular, fluctuations in demand and supply have had a powerful impact on the value and perception of diamonds worldwide. The economics of diamond during this decade is the subject of the lead article in this issue, by William Boyajian, which examines the many different factors that led to the "boom" period of the late 1970s, the subsequent recession, and the striking resurgence in recent years. Photo @ Harold s) Erica Van Pelt -Photographers, Los Angeles, CA. Jewelry courtesy of Larry Kane and Ballreicli if) Kantor, Los Angeles, CA; rough diamonds courtesy of Paul Kaplan, L. Kaplaa, Inc., New York, NY. Typesetting for Gems & Gemology is by Scientific Composition, Los Angeles, CA. Color separations are by Effective Graphics, Compton, CA. Printing is by Waverly Press, Easton, MD 0 1988 Gemological Institute of America All rights reserved ISSN 00 16-626X EDITORIAL Editor-in-Chief Editor Editor, Gem Trade Lab Notes STAFF Richard T Liddicoat Alice S. Keller C, W Fryer Associate Editors 1660 Stewart St. Editor, Gemological Abstracts Peter C. Keller Santa Monica, CA 90404 Dona M. Dirlam Telephone: (800) 421-7250 x25 1 D. Vincent Manson Editor, Book Reviews John Sinkankas Subscript ions Elise B. Misiorowski Lisa Hebenstreit, Manager Technical Editor Bruce Tucker, Asst. Manager Contributing Editor, John I. Koivula Carol M. Stockton Telephone: (800)42 1-7250 x20 1 Editors, Gem News Editorial Assistant lohn I. Koivula Nancy K. Hays Robert C. Kammerling PRODUCTION Jennifer Brosious Julie Matz Jan Newell STAFF Linda Manion Patricia Mayer Ruth Patchick Susan Kingsbury Peter Johnston EDITORIAL William E. Boyajian C. S. Hurlbut, Jr, Henry 0. A. Meyer REVIEW BOARD Santa Monica, CA Cambridge, MA West Lafayette, IN Robert Crowningshield Robert C. Kan~n~erling Sallie Morton New York, NY Santa Monica, CA Son lose, CA Alan T. Collins Anthony R. Kampf Kurt Nassau London, United Kingdom Los Angeles, CA P.0. Lebanon, N/ Dennis Foltz Robert E. Kane Ray Page Santa Monica, CA Los Angeles, CA Santa Monica, CA Emmanuel Fritsch John 1. Koivula George Rossman Santa Monica, CA Santa Monica, CA Pasadena, CA C. W. Fryer James E. Shigley Santa Monica, CA Santa Monica, CA SUBSCRIPTIONS Subscriptions in the U.S.A. are priced as follows: S32.95 for one year (4 issues), S89.95 for three years 112 issues] Subscriptions sent elsewhere are $42.00 for one year, S120.00 for three years. Special annual subscription rates arc available for all stuilciits actively involvcd in a G1A program: $29.95 U.S.A., $39.00 elscwhcre. Your student number must be listed at the time your subscription is entered. Single issues may be purchased for $8.50 in the U.S.A., $1 1.50 elsewhere. Discounts are given for bulk orders of 10 or more of any one issue. A liiniteil number of back issues of G&G arc also available for purchase. Please address all inquiries regarding subscriptions and the purchase of single copies or back issues to the Subscriptions Manager. For subscriptions and back issues in Italy, please contact Istituto Geininologico Mediterraneo, Via Marn~olaia#14, 1-38033, Cavalese TN, Italy. To obtain a Japanese translation of Gems e) Gemology, contact the Association of Japan Gem Trust, Okachin~achi Cy Bldg, 5-15-14 Ucno, Taito-ku, Tokyo 110, Japan. MANUSCRIPT Gems el Gemology welcomes the submission of articles on all aspects of the field. Please see the Suggestions SUBMISSIONS for Authors in this issue of the journal, or contact the editor for a copy. Letters on articles published in Gems of Gemology and other relevant matters are also welcome. COPYRIGHT Abstracting is permitted with credit to the source. Libraries are permitted to photocopy beyond the limits of U.S. AND REPRINT copyright law for private use of patrons. Instructors are permitted to photocopy isolated articles for noncommercial PERMISSIONS classroonl use without fee. For other copying, reprint, or republication permission, please contact the Editor, Gems ft* Gemologjf is published quarterly by the Gemological Institute of America, a nonprofit educational organization for the jewelry industry, 1660 Stewart St., Santa Monica, CA 90404. Postmaster: Return undelivcrablc copies of Gems el Gemol~yto 1660 Stewart St., Santa Monica, CA 90404. Any opinions expressed in signed articles are understood to bc the views of the authors and not of the publishers. his current issue of Gems o? Gemology contains an interesting review by T GIA President William E. Boyajian of the economics of the diamond industry over the last decade, with its exceptional ups and downs in contrast to the relative stability of the preceding decades. To those who view Gems o) Gemology as purely a scientific journal, such an article may seem surprising. Today, however, the study of gemology is more than refractive indices and specific gravities; it goes beyond synthetics and simulants, localities and Leveridge gauges. Gemology is now a truly interdisciplinary profession, requiring a good balance of the technical, aes- thetic, and commercial aspects of gems. Today's professional gemologist cannot function in a vacuum. A competent gemologist must be able not only to identify and evaluate gemstones, but also to judge the effectiveness of the design, workmanship, and quality of the jewelry in which the gems are set. Today's gemologist must know business management, salesmanship, and a variety of other subjects that are not strictly gemological in nature. Most contemporary gemologists are not just scientists, but are deeply involved in the gem and jewelry industry as a business. To such individuals, knowledge of world economic conditions, currency relationships, trade balances, and other factors that impact the gem trade is essential if they are to succeed in this highly competitive field. To be fully effective in their vocation, modern gemologists must be well rounded - and well informed. Like the management of the Gemological Institute of America, the editors of Gems &> Gemology see among the journal's objectives the enhancement of the gemologist's effectiveness in all aspects of his or her business activities. The article by Mr. Boyajian is another step in our program to include articles dealing with these broader aspects of gemology. Richard T, Liddicoat Editor-in-Chief Editorial GEMS & GEMOLOGY Fall 1988 133 AN ECONOMIC REVIEW OF THE PAST DECADE IN DIAMONDS By William E. Boya jian The diamond industry was buffeted by lthough the market for gem diamonds has long extreme price volatility during the last A enjoyed stability and gradual appreciation, it can decade, unlike any encountered since the nevertheless be sensitive to a variety of economic forces. Great Depression of the 1930s. Although At no time has this been more evident than in the period the industry is currently enjoying a re- that spanned the late 1970s to the mid-1980~~when market surgence of activity worldwide, partic- demand and prices climbed to incredible highs- before ularly in the Far East, today's market dif- falling precipitously to equally stunning lows. fers significantly from what it was 10 years ago. This article reviews the factors In November 1973, the American economy entered its that led to the enormous demand for dia- sixth post-World War I1 recession. In 1974 and 1975, De monds in the late 1970s, examines the Beers's rough diamond sales declined by 5% and 15%, causes of recession in the early 1980s, and respectively. Consumer confidence and consumer spend- provides an analysis of the comeback of ing in the United States bottomed out. The second half of diamond in 1986. Inasmuch as events the 1970s, however, heralded a period of rapid inflation, during this period ushered many changes during which many investors sought tangible assets as a into the diamond trade, an understanding hedge. Diamonds, with a tradition of steady, rising value, of how economic forces affect the supply. became an obvious target for speculators. The diamond demand, and value of diamond is critical boom of 1976-1979 was followed by a collapse in 1980: to all gemologists. Factors such as infi- tion, recession, interest rates, and dispos- The most durable of all gems (figure 1)became a victim of able income, as well as fluctuations in economic chaos. worldwide exchange Tales, had, and un- During the first half of the 1980s, the diamond trade doubtedly will continue to have, an im- suffered one of its worst recessions in modern history. pact on the health of the diamond market, Although worldwide retail diamond sales increased during most of this period, prices at all levels dropped as the market sought to absorb the excess inventories built up during the late 1970s. By 1986, however, the diamond market had rebounded. The weakness of the U.S. dollar, ABOUT THE AUTHOR and the consequent strength of other currencies, has Mr.

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