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Gold and Jewelry Prices in 2010

As gold prices pass the $1,300 per ounce mark, it might be useful to talk about the relationship between gold prices and the price of finished jewelry. In the late 1970s, during the first gold rush I can recall, prices seemed to go up every week culminating in a peak price of $850 per ounce in early 1979. During this period, we adjusted our prices weekly and often found ourselves raising the ticket price on finished pieces to keep up with our replacement cost.

A Finished Piece of Handmade Jewelry Averages 70% labor, 30% gold:

After the peak things gradually calmed down and gold tended to trade between $350-500 for most of the next two decades. Gold is a material, in handmade jewelry it is normally 30% of the finished price. That means that 70%, on average, is the cost of the craftsman’s highly skilled labor. Paradoxically, the more handwork the less of a factor the actual materials become.

During the go-go late 70s some commercial manufactures thinking to take advantage of consumer awareness of high gold prices, began marketing gold jewelry by weight.

“Don’t worry, the gold is free!”

This was a problem for hand craftspeople. I recall be asked frequently to weigh handmade original pieces. At first I simply refused, but later I developed a standard response. “Don’t worry”, I would say smiling my most ingratiating smile, “the gold is free.” You can imagine the effect on the potential client, like a deer caught in the headlights, stunned speechless. It did provide an opening for me to launch into an explanation of the differences between commercial and handmade jewelry. Sometimes it worked, oftentimes it didn’t.

Brooch, hand constructed of gold sheet and wire.

Using the international gold price to deduce the price of a piece of handmade jewelry is a bit like comparing the price of a wooden house to the cost of a tree. The fact is, no one pays the spot gold price quoted in the morning paper. Craftsmen do not buy ingots, they buy manufactured sheet and wire of a certain size, shape and fineness.

Nobody Pays The Spot Price:

Gold: Manufactured sheet and wire stock

The price of manufactured gold differs from the spot price in the same way that the price of a board foot of lumber differs from the price of a pine tree. It is , in fact, 20-35% higher. Then there is waste. Saw a 1″ circle from a 1″ square of gold sheet and you end up with a certain amount of dust and a few tiny, unusable corners. Unless the workshop generates a great deal of scrap it is not cost efficient to melt that scrap down, make an ingot and roll it out into sheet. We can do it in our workshop, but under 5-6 ounces it doesn’t pay. So the dust and scrap is returned to the refinery for cash or credit of roughly 95% of the spot price. Net loss, 35% of the price originally paid. Polishing then reduces the rough weight by about 10% to yield the lovely hand polished piece of jewelry you see on display.

So, the next time you are tempted to ask a craftsman to weigh a piece of fine handmade jewelry, remember that gold price has a nebulous relationship to a finished piece of jewelry, particularly handmade jewelry. Remember too, craftsmanship counts.

From The Sun King To The Smithsonian, The Epic Journey of The Hope Diamond

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On a dark night in September of 1792, someone made off with the 69 carat French Blue diamond. Confiscated from King Louis XVI by the revolutionaries of the French National Assembly, the gem, along with the rest of the French Crown Jewels, had been secreted in a royal storehouse for safe keeping. Many of the gems stolen that night were subsequently recovered by the French government. The French Blue was never seen or heard of again.

Read the complete article: HERE

Campbell Bridges; The Death of a Lion

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Just last night I received word that my good friend, the legendary geologist Campbell R. Bridges has been murdered by a mob near his Scorpion Mine in Kenya.

I first met Campbell Bridges in 1995. He hosted my wife and I when we visited Nairobi on a gem buying trip. It was my second and my wife Rebekah’s first trip to Kenya. I was Gemology Columnist for National Jeweler Magazine at the time. I had been referred to him as one of the foremost experts on East African gemstones and I had corresponded with Campbell for several months before the trip.

Campbell Bridges judging rough ruby. Photo: Tsavorite USA

My first meeting with him tells much about the man; , it was about 8:00am, we had arrived at our Nairobi hotel around 3am. At 8am the phone rang. Half asleep, I groped for the phone. A voice boomed out, “welcome to Africa, Richard. We leave for the mine in one hour, I’ll pick you up t your hotel.”

Two hours later, our mouths crammed with greasy samosas, we were careening down a two lane highway in an aging Subaru wagon on our way to Campbell’s Scorpion Mine near Vo i (halfway between Nairobi and Mombasa). We were doing 100km and Campbell was urging his Kikuyu driver to go faster. Weaving from lane to lane, we whizzed past huge lorries with canvas tops like Conestoga wagons and wheels large enough to crush our little Subaru wagon. Road accidents were the number one cause of death in Kenya at that time. More than once, I thought my time had come.

Four and one half hours later we arrived at Campbell s Boma, a primitive mine site, a fort really, surrounded by giant sisal plants. The camp was in an uproar. Zarrurra (bandits), or midnight miners had been poaching on another of Campbell’s mine site called GG3.

Campbell was amazingly charismatic. As darkness fell, I found myself part of a punitive expedition on our way to surprise the Zarrurra at the mine site a few miles into the hills. Campbell had a panga (machete) and a steel mesh shield, I was armed with an Irish shillelagh. in the back of the truck several Masaii askaris carried the traditional club and spear. Fire arms were outlawed in Kenya, only the bandits had them. Campbell’s askari’s were required to have a permit to carry a bow and arrow.

Tree House, The Scorpion Miine, Tsavo National Park, Voi, Kenya. Photo: Tsavorite USA

Well, to my great relief, we encountered no bandits at the mine site. We found nothing but the smoking remains of a cooking fire. Campbell’s askaris were also no where in evidence. We returned to our camp at the Scorpion Mine and went off to bed. That was my first day in Kenya.

Later I found out the just that weekend, Campbell had been robbed, his office broken into and years of backbreaking work in the form of “millions” of dollars in tsavorite garnet stolen. That was a loss that would have staggered most men, it hardly even slowed Campbell Bridges down. That was the measure of the man.

Campbell Bridges was my mentor and my friend. A man of the old school, rough around the edges, tis true but a man of honesty, integrity and honor. We had many conversations and not a few arguments. Campbell never really accepted the new political realities of East Africa. For him, The Raj, the period of British rule during which he grew up, was the greatest time and he mourned its passing.

Campbell loved to quote his favorite author w, the novelist Wilbur Smith. I remember him telling us, that you had never really understood Africa until you had heard the lion’s roar in the night. Well, Campbell Bridges was a real life character who would have been an apt subject for one of Smith’s novels. My wife calls Campbell a lion. They feared him when he was strong and only dared attack when he was weakened by age.

Campbell Bridges was a true lion of Africa. He attacked life and tore from it all that it had to give. His was a hard life but a fulfilling life and he died as he lived with a roar that shook the night. Rest in peace, my friend, there will never be another like you.

My wife Rebekah and I send our sincere condolences to his wife Judy, daughter Laura and son Bruce.

Rockin in Rio

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“Rio, when my baby smiles at me I go to Rio de Janeiro”

Arrived in Rio last Sunday night. Not long after my book came out in 2001 I received a letter from Hans Stern, 84-year-old founder of H. Stern the world’s fifth largest jewelry company. It was gratifying to know that a man like Mr. Stern had not only liked the book but had taken the time to write. “Next time you are in Rio, stop in and have a Café Zihno.” So taking the man at his word I called. Next thing I knew a car arrived and my wife Rebekah and I were on our way to Stern’s headquarters in Ipanema.

We spent an enjoyable hour as promised over Café zihno. For those of you who have never been to Brazil, Café Zihno is the national drink and is very much like Italian espresso. Mr. Stern may be an octogenarian but he still loves his job and is in the office every day

Mr. Stern brought out his personal gem collection, which included a carat plus Emerald cat’s-eye. I haven’t seen one so fine since 1987. He also showed us a tray containing several hundred carats of sherry topaz and an exceptional large red topaz from the Capao mine, the best I have ever seen. We topped it all off with a personally conducted tour of the Stern headquarters.

Lecture Series

I have been invited on this 2007 Regent (Radisson) Seven Seas World Cruise to deliver a series of lectures on gemstones. I have a grueling schedule that requires a 50-minute lecture about every three days. Other than that Rebekah and I are free to enjoy the many pleasures of the world cruise. Regent cruises are the last word in luxury, everything is included. With ports of call like St. Helena, Walvis Bay, Cape Town and Mombassa we will have little time to get bored.

St. Helena

Four days by ship out of Rio, we arrived sighted the island. St. Helena is a small island off the coast of West Africa. When Napoleon Bonaparte escaped from Elba the English, taking no chances exiled him to this small bit of volcanic rock, 500 miles from nowhere, after his final defeat at Waterloo. The former Emperor of the French spent his last six years on the island under the watchful eye of the British Army.

Originally discovered by the Portuguese, St. Helena was used for a refreshment station by Portuguese, Dutch and English ships navigating around the Cape of Good Hope. In those days, mariners often left goats and sheep and planted vegetables at places along their routes to reprovision other ships traveling that way.

The famous French Gem dealer and traveler, Jean-Baptiste Tavernier, the man who discovered what was to become the Hope Diamond, arrived on the island on February 8, 1649, twenty-two days out of Cape Town on a voyage from Batavia and noted the many lemon trees that grew on the island. Lemon juice, in those days, was the sovereign remedy for Scurvy, a disease caused by a lack of fresh vegetables.

We took the tour. Seems like you can see the whole place in about three hours. As to what the 6,000 or so present inhabitants on St. Helena’s 47 square miles is a mystery to me but the fishing is good.

Namibian Diamonds

Dateline: Walvis Bay, Namibia. Namibia, one of Africa’s “newest” nations, stretches 1300 km down Africa’s southwest coast, bordered in the north by Angola. to the south by The Republic of South Africa.

In 1908, a railway worker discovered the first diamonds in what was then the German colony of South West Africa. The discovery set off a free-for-all gem rush that ended only when the Colonial administration absorbed all private leases into one huge Concession, stretching the length of the country’s southern coast and some 100 km inland.

After the world war the territory became a League of Nations Protectorate administered by South Africa, which managed t
o hold onto the colony until 1990. Namibia has the richest marine diamond deposits in the world, with an estimated reserve of over 1.5 billion carats. All these deposits are secondary deposits meaning that the diamonds originally came from volcanic in situ deposits that were transported via the Orange river from South Africa and swept northward by the northwest current that runs just off the coast.

The average size of diamonds mined off the Namibian coast is a bit over ½ carat. A whopping 95% of these stones are gem quality.

Diamonds are responsible for 42% of all export earnings and 52% of government income and account for between 7-10% of the country’s GDP.

Blood Diamonds, Blood Gemstones

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Blood Diamonds, Blood Gemstones

by Richard W. Wise

The much feared, long anticipated movie Blood Diamond opened December 8th and has succeeded in resurrecting the debate about the use of diamonds to finance armed conflict in Africa. Numerous media outlets have done features on conflict diamonds and the industry is nervously chewing its fingernails waiting to see o what extent the negative fallout will impact Christmas sales.

Blood Diamond is a fairly well crafted action-adventure flick set in the West African country of Sierra Leone and features Leonardo DiCaprio, Jennifer Connelly and Djimon Housoun. DiCaprio plays the cynical diamond smuggler, Connelly an idealistic but tough-minded reporter with azure eyes to die for and Housoun the part of Solomon Vandy, a simple fishermen who, along with his son Dia, is forced into slavery in the diamond fields; Soloman finds a big rock and the action begins. DiCaprio wants the diamond, Connelly a story and the fisherman wants to retrieve his son who has been turned into a child soldier.

Some reviewers have had difficulty seeing the good looking DiCaprio in a tough-guy role. I have no such difficulty. DiCaprio doesn’t overplay it. He displays just the right combination of punky-arrogance and fits the part well. As for Connelly’s character, a lonely expat’s dream, I met my dream one night years ago in Kowloon and will never forget the night.

The locales fairly reek of authenticity. Speaking as one who has been there, I can say that the film suceeds in capturing the real look and feel of real gem workings and the back-alley hubbub of boom-town commerce as it exists today in many places, not only in Africa but in Southeast Asia and South America as well. For a look a the real thing see my Ruby Boomtown: http://www.colored-stone.com/stories/jul06/madagascar1.cfm

Although Blood or conflict diamonds have been a front burner issue for several years, diamonds are not the only gemstone or the only commodity used to exploit and enslave our fellow man. If you drink Florida orange juice, eatin Burmese sugar, buy Chinese products, wear Egyptian cotton or eat chocolate , according to the 2002 issue of National Geographic, you may be funding human misery.

The U. S. currently imposes economic embargos on goods made in a number of nations, North Korea, Iran, Burma, in an attempt to economically throttle these malignant and repressive dictatorships. Does it do any good? Those who advocate the use of economic sanctions point to the experience in South Africa where a worldwide boycott, that somehow did not inclued diamonds, contributed to the fall of the white minority regime and the end of Apartheid. Others are not so sure!

Take Burma, a country that I have visited several times. The Burmese army has insinuated itself into and exerts a degree of control over all alspects of gem production from mining to cutting to distribution. Syndicates in which the generals are full partners, control all the larger mines in Mogok, the old ruby producing area of Upper Burma. If you are involved in large scale mining in Burma, you are in business with the army. However, much of the mining and more than half of the gemstones are produced by small-scale Mom and Pop opoerations that fly beneath the government’s radar. A sucessful boycott may hurt the bad guys but it will also have a devastating effect on small business as well. The General’s may have to cut back on their caviar ration but the little guy may literally starve.

“While Burma’s gem mines are nominally under the control of the military, the very nature of gem mining means that the lion’s share of production is smuggled out by freebooters. Funds from these smuggled goods sustain both odinary miners and traders, as well as rebel armies fighting against the Burmese military.” Richard Hughes

“Legal” gems are auctioned every year at the government-sponsored emporium. At the event held this October over a thousand merchants from twelve countries attended the event. Myanmar started to hold these gem shows in 1964 and since then the government has grossed 600 million dollars.

Part of the reason why the anti-aparthieid boycott suceeded in South Africa was that the boycott embarrassed the white power structure. White South Africans are culturally European and were shamed by their European and American cousins. These same countries were also South Africa’s main trading partners. Burma’s main trading partners are India and China and the generals have demonstrated that they simply don’t care what Europe and America thinks.

Highlights from our Antique Department:

Masterpieces of Art-Nouveau:

This original Art-Nouveau masterpiece by Lucien Gautrait appeared in Southeby’s Magnificent Jewelry auction in 1995. Very few signed pieces have survived from this period. Art Nouveau evolved out of the Arts & Crafts Movement and enjoyed a brief surge of popularity in the years between 1900-1910.

The piece features the plique a jour or “windowpane enamel technique that was perfected during this period. It is one of the most difficult and time consuming of all hand jewelry making techniques. This signed piece (pictured right) is of pierced 18k yellow gold, makes liberal use of plique a jour and is accented with emeralds and a natural pearl dangle.

Vivienne Becker in her seminal book: Art Nouveau Jewels, features several of Gautrait’s pieces and describes him as a “major Paris jeweler”. According to Becker: “master pieces of Art Nourveau jewels were the work of individual designers who presided over smaller workshops. These included Galliard, Gautrait and Lienard….” For a look at our gallery of fine antique jewelry: www.rwwise.com, click gallery, Antique…For further information call us at 800.773.0249.

Interested in reading more about real life adventures in the gem trade? Follow me on gem buying adventures in the exotic entrepots of Burma and East Africa. Visit the gem fields of Austrailia and Brazil. 120 photographs including some of the world’s most famous gems. Consider my book: Secrets Of The Gem Trade, The Connoisseur’s Guide To Precious Gemstones. Now only $26.95. You can read a couple of chapters and order online: www.secretsofthegemtrade.com

Coming To R. W. Wise, Goldsmiths. Saturday, November 10th

Ruby & Sapphire; Prices at the Hong Kong Show