Prices at the 2007 Hong Kong Show
by Richard W. Wise
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.
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