5 Most Important Factors that Impact Gold Prices

1. Changes in exchange rate. A weaker U.S. dollar exchange rate is usually encouraging the increase in world gold prices. This is because investors choose to sell their dollar and then buy the gold with the hope that gold can protect the value of their assets. For example, while the value of dollar exchange rate against other currencies continue to decline, the price of gold continue to rise.

USD Exchange Rate up = Gold Price Down

2. World political situation. Increase of gold price in the end of 2002 and early 2003 occurred as a result of the attack to Iraq by the U.S. command allies. Market participants shifted from money market investment and the stock market to gold investment, causing the demand for gold jumped so sharply.

US participation in any WAR = Gold Price UP

3. Supply and demand. An example of this 'supply and demand of gold' is like the event occured in mid-1980. At that time, forward sales by mining companies are always blamed for the rise of gold price. Although in business term, the mining company's actual behavior is reasonable. By making forward sales when gold rose, they could secure the mine output price at a fairly attractive price. Another example, the case in mid-1998 in which the gold price continued to decline. At that time, Central Banks in Europe Union said that they would reduce their gold reserves regarding the implementation plan of the Euro currency. Because of it, the price of gold has been plunged immediately around 290 dollars per troy ounce.

Bank Gold Reserve Ratio Down = Gold Price Down

4. The global economic situation. Approximately 80 percent of the total supply of gold has been used by jewelry industry. Jewelry consumption is a major influence on the demand side. As economic conditions improved, the need for gold tend to rise. However, the most sensitive industry to be influenced deeply is jewelry industry.

Recession had influenced the jewelry demand in the year 1982-1983, because at the same time, the gold price also rose. In the recession of the early 90, The level of jewelry demand was falling too, but at this time the price of gold also fall down simultaneously.

As described above, economic situation may lead to high inflation. So, the benefit of using the gold as a hedging tool against inflation has been felt by investors for a long time. With gold, investors got a perfect protection against the decline in purchasing power. On the years 1978-1980 the price was booming. While inflation in the U.S. rose from 4 percent to 14 percent, the gold rose three-fold.

High Inflation = Low Purchase power = Gold Up as investor see this safe haven

5. Interest rate. When interest rate rise, peoples tend to keep money on deposit better than gold which does not earn interest (non interest-bearing). This will cause pressure on the price of gold. Conversely, when interest rate fall down, the price of gold will likely rise. In theory, if the short-term interest rate rise, your gold fell. In Indonesia, this theory does not always work. In 1998, as Rupiah fell sharply against the U.S. dollar currency, the government raised interest rate significantly for the hope to put a halt to rising U.S. dollar exchange rate. As a result, despite from rising interest rate, gold price also rose.

High Interest Rate= Gold Price Down

Safe and Effective Ways to Clean or Disinfect Diamond Jewellery

Safe and Effective Ways to Clean Diamond Jewellery

Hand lotions, hair styling products and everyday grime, leave enough of a film on your diamond ring to keep it from looking its best. And if you wait too long between cleanings, these materials accumulate into a thick layer of gunk on the back of your diamond, blocking light and making the diamond appear dull and lifeless.

Diamonds are the hardest substance known, but that doesn't mean we can bring them back to life with any old cleanser. Coatings and other materials used to enhance diamonds can sometimes be removed by harsh chemicals or vigorous scrubbing, so take care when it's time to make your diamond ring sparkle.

Gentle & Effective Ways to Clean Diamond Rings

• Soak your diamond ring in a warm solution of mild liquid detergent and water. Ivory dishwashing liquid is a good choice, but any other mild detergent is fine.

• Use a soft brush if necessary to remove dirt. Soft is the key -- don't use a brush with bristles that are stiff enough to scratch the ring's metal setting.

• Swish the ring around in the solution, and then rinse it thoroughly in warm water. Close the drain first, or put the ring in a strainer to protect it from getting washed away!

• Dry the diamond ring with a lint-free cloth.

If the diamond and setting needs extra help, use dental Water Pick to flush away small bits of grime. You can also use a wooden toothpick to very carefully push dirt away from the diamond and setting.

Cleaning Unfilled Diamonds

Diamonds that have not been fracture filled can be cleaned with a solution of ammonia and water. Use the gentler liquid detergent solution for fracture filled diamonds, because ammonia might eventually either cloud or remove the coating that's been placed on the gemstone. Back to top

Cleaning Rings with Multiple Types of Gemstones

The method you use to clean jewelry should protect its weakest element. If your ring includes other gems, use a cleaning method that is suitable for the less durable stones. Back to top

Protect Diamond Rings from Chlorine

You might already protect your hands from harsh chemicals, but if you don't, think about how chemicals such as chlorine can affect your fine jewelry. Remove your rings or wear gloves to keep chlorine away from your rings.

Diamond Care

Regularly inspect your diamond jewelry to spot a loose stone or bent prong before it's "too late." It's a good idea to have your diamond jewellery examined and cleaned at least once a year by a professional jeweller.

Everyday exposure to creams, skin oils, hairspray, household chemicals and other substances can cause buildup that will dull your diamond's brilliance and sparkle.

Diamonds are the hardest substance known, but coatings and other materials used to enhance them can sometimes be removed by harsh cleansers and vigorous scrubbing, making it even more important to clean the gems with care.

• Soak your diamond ring in a warm solution of mild liquid detergent and water.

• Use a soft brush if necessary to remove dirt. Soft is the word—don't use a brush with bristles that are stiff enough to scratch the ring's metal setting.

• Swish the ring around in the solution, then rinse it thoroughly in warm water. Block the drain or put the ring in a strainer to keep it from slipping away!

• Dry the ring with a lint-free cloth.

• If the ring needs extra help, you may use a wooden toothpick to carefully push dirt away from the stone and setting.

• Fragile settings and estate jewelry won't take kindly to being scrubbed with a toothbrush, so use a soft touch. Then, just rinse the diamond with water and wipe with a soft, lint-free cloth.

• If your jewellery has other gemstones, use a cleaning method that takes care of the less durable stones.
  Back to top

PLEASE DO NOT

• Put your diamonds away with other jewellery pieces; they could scratch one another. Use a fabric lined case with a pouch for each piece, or wrap them in tissue paper

• Bring your diamonds in contact with household chemicals

• Expose your diamond ring to products containing chlorine. Wear gloves if you need to use such products

• Expose diamonds to dripping bleaches or hair dyes

• Don't use harmful solutions. Chlorine or abrasives should never be used when cleaning diamonds, especially those set in jewelry. These erode some of the metals often used in diamond settings, and may loosen prongs, or even dissolve the metal completely.

CLEANING PRECIOUS METALS

Caring for your gold jewelry

• To maintain your gold jewelry’s sparkle, clean it regularly.

• Soak your gold or platinum jewelry in warm water mixed with a few drops of ammonia.

• Use a soft-bristled toothbrush gently for more extensive cleaning.

• After cleaning and rinsing, dry and polish with a soft cloth.

• Close your drain if you are cleaning near a sink.

• Store it in a fabric-lined case with separate pouches for each piece

• compartments, or wrap pieces individually in soft tissue paper.

Caring for White Gold Jewelry

When white gold is sold, it is always rhodium plated. Rhodium is a hard, durable, silvery-white metal that gives white gold (which is actually a very pale yellow) a very white look in the showcase and on your finger. This white look will soon wear out when there is friction. This usually starts by the shank (the part of the ring that goes around the finger) starting to “turn yellow”. Later, all the exposed edges and corners will start “yellowing” as well.

The easiest and least expensive solution is to take it to your local jeweller to have the ring re-rhodiumed. The cost of this temporary solution is minimal, and it needs to be repeated as this new layer wears off. A more permanent solution would be to consider remounting your stones in a platinum or palladium alloy ring.

While lasting and durable, gold can become scratched or dented, particularly if handled roughly. Regularly check your gold jewelry for loose prongs or any damage, promptly bringing it to a professional jeweler for repair if needed. 

Types of Engagement Rings and Style

1. Classic

    

The prong setting is one of the most popular and common settings. This setting highlights the stone and allows in more light, emphasizing the stone’s brilliance.

2. Vintage

Engagement rings crafted in the style of wedding jewelry from a bygone age. From molds that date back to the Victorian era come beautiful filigree rings that have the look of antiquity.

3. Halo

The halo is a circle of micropave diamonds that surround the center diamond or stone, visually expanding the appearance of the center by as much as a half carat or more. Cushions, round, asscher, princess, oval and even emerald-shaped diamonds may be accented with a halo of round micropave diamonds.

4 Stone 

The three-stone diamond engagement ring is a classic choice for proposals, as well as being a popular gift for other occasions such as anniversaries. The three-stone ring is as beautiful as it is meaningful, Legend has it that the stones on the three-stone setting represent the past, the present, and the future.

INDIAN DIAMOND JEWELLERY INDUSTRY

INDIAN DIAMOND JEWELRY INDUSTRY

The diamond  jewellery industry occupies an important position in the Indian economy. It is a leading foreign exchange earner, as well as one of the fastest growing industries in the country.

The two major segments of the sector in India are gold jewellery and diamonds.  Gold jewellery forms around 80 per cent of the Indian jewellery market, with the balance comprising fabricated studded jewellery that includes diamond and gemstone studded jewellery. Besides, India is world's largest cutting and polishing Industry for diamonds, well supported by government policies and the banking sector with around 50 banks providing nearly $3 billion of credit to the Indian diamond industry.

A 20-40% portion of the diamond jewellery manufactured in India is consumed in the domestic market. However, a major portion of the rough, uncut diamonds processed in India is exported, either in the form of polished diamonds or finished diamond jewellery. The largest consumer of gold worldwide, India is also the leading diamond cutting nation.

Gems and jewellery is one of the fastest growing sectors in the Indian economy with an annual growth rate of approximately 15 per cent. The gems and jewellery industry accounts for nearly 20 per cent of the total Indian exports and employs over 1.3 million people, directly or indirectly.

The Gems and Jewellery (G&J) market is a significant contributor to the Indian economy, based on the size of the domestic market and through its contribution to the country’s exports. India is the largest consumer of gold (around 20 percent of global consumption) and also the largest diamond processor (around 90 percent by pieces and 55 percent by value of the global market).

Structure of the Industry:

India’s G&J industry is highly unorganized and fragmented with 96 percent of the total players being family owned businesses. The gold processing industry has around 15,000 players, with only 80 having revenues over USD 5 million. India is also home to around 450,000 goldsmiths, 100,000 gold jewellers along with 6,000 diamond processing players and 8,000 diamond jewellers.

Organised players such as Tata with its Tanishq brand, have, however, been

growing steadily to carve a 4 per cent market share.

In the global diamond market today, Indian diamonds account for 55 per cent share in value terms, 80 per cent share in caratage (weight) terms and 90 per cent share in volume terms. Today there is a ready availability of an entire range of diamonds in nearly every size, quality and cut.

  

Certification of Gems and Jewellery:

The Gems & Jewellery Promotion Council is India's certification authority. The government's Central Board of Excise and Customs has banned the import or export of rough diamond shipments, which are not accompanied by a Kimberley Process certificate launched in Switzerland. Certification for quality diamonds and jewellery has boosted exports and has resulted in greater acceptance of Indian products in the world market.

Regulating Bodies:

  

The Gem and Jewellery Export Promotion Council (GJEPC): This is the apex body of the gem and jewellery trade in India, which was set up in 1966 for promoting precious stones and jewelry exportations. With strength of 6,500 members spread all over the country, the Council is primarily involved in introducing the Indian gem & jewellery products to the international market and promotes their exports.  

The Gem and Jewellery Trade Council of India (GJTCI): This council is established with the main aim of boosting the gem and jewellery trade of India. It plays an important role in showcasing the Indian gem and jewellery to the international market.  

Market Trends:

The Indian jewellery market is one of the largest in the world, with a market sizeof $13 billion. It is second only to the US market of $ 40 billion and is followed by China at $11 billion. The gold jewellery market is growing at 15 per cent per annum and the diamond jewellery market at 27 per cent per annum.

The United States and Hong Kong were the largest importers of gems and jewellery from India, with a share of 26 per cent each, followed by UAE at 21 per cent.  

India is the largest diamond cutting and polishing centre in the world - the Indian diamond cutting and polishing industry enjoys 60 per cent value share, 85 per cent volume share and 92 per cent share of the world market in terms of number of pieces. In other words, nearly 9 out of 10 diamonds sold worldwide are cut and polished in India.

With its cut and polished diamonds, colored gemstones, gold jewellery, pearls, non-gold jewellery and fashion jewellery, India accounts for almost 50% of the international market. The gems and jewellery sector contributes nearly 55% of the world’s net exports of cut and polished diamonds in value, 90% in terms of pieces and 80% in terms of carats. Every 11 of 12 diamonds sold around the globe are processed in India, irrespective of where these are mined.

In terms of carat, India's share in the diamond sector is about 80% of the world market. Employing over 90% of the global diamond industry workforce, India also accounts for 90% of the volume of diamonds processed in the world.

 Foreign Direct Investment Policy:

· 100% FDI is allowed under automatic route for exploration and mining of

minerals other than diamonds and precious stones.

· For exploration and mining of diamonds and precious stones FDI is

allowed up to 74% under automatic route.

· For exploration and mining of gold and silver and minerals other than

diamonds and precious stones, metallurgy and processing, FDI is allowed

up to 100% under automatic route .

Exports and Imports:

The jewellery industry in India contributes over 15% of the country's total exports and provides employment to 1.3 million people directly and indirectly.

In 2011-13 India's gem and jewellery industry recorded exports of US$ 20.1 billion and exports of diamond merchandise alone touched US$ 15.77 billion.

In 2011-13, exports recorded a 22.27 per cent growth touching US$ 20.88 billion with diamonds accounting for 70.59 per cent of the total exports, gold jewellery accounting for 26.91 per cent, coloured gem stones and others accounting for 1.32 per cent and 1.16 per cent respectively.

The gem and jewelry sector accounted for 13.41 percent of India's total merchandise exports in 2011-13. In comparison, total imports of gem and jewelry provisionally rose to $18.5 billion in 2011-13, growing 32.5 percent from 2011-13.

The 2012-13 fiscal also started on a positive note, with the gems and jewellery exports rising by nearly 17 per cent to US$ 9.05 billion during April-August 2008, compared to US$ 7.74 billion in the corresponding period last year. Significantly, rough diamond exports stood at US$ 386 million while cut and polished diamond exports increased by 22 per cent to US$ 6.5 billion. 

India's gem and jewellery exporters rely a lot on clients of the US, China, Russia, 

Commonwealth of Independent States (CIS), and the UAE for a major portion of their revenue. While the US and Hong Kong account for 26 percent of total gem and jewelry exports, the UAE account for 21 percent, Singapore 9 per cent and Belgium 8 Per cent.

Composition of Exports:

· Gold Jewellery Exports: This segment registered a growth of 8.07 per cent

with the exports of US$ 5622.41 million during April 2012-March 2013 as

against US$ 14200 million during April 2012-March 2013.

· Cut and Polished Diamonds: The share of this segment in the exports

stood at US$ 14100  million (provisional) for the period April 2012-

March 2013.

  

· Coloured Gemstones: This segment accounted for exports worth US$

288  million (provisional) for the period of April 2012-March 2013. This

segment grew by 12.15 per cent in April 2012-March 2013

The major destinations for Indian jewellery exports have been the United States, UAE, Hong Kong, Singapore, Belgium and Israel.

Future of the Indian Jewellery Market:

· India’s growing importance in the global jewellery market is only expected

to increase in the future with total estimated jewellery sales of US$ 21

billion by 2010 and US$ 37 billion by 2015.

· Diamond jewellery consumption in India is also estimated to jump by 78

per cent in 2010.

· Branded jewellery is likely to be the fastest-growing segment in domestic

sales. The sector is expected to grow at 40 per cent annually to touch US$ 2.2 billion by 2010.

· Indian diamond jewellery industry is the third largest consumer of polished

diamonds after USA and Japan. Diamond jewellery consumption is likely

to jump to nearly 80 per cent in 2010 and over 95 per cent between 2010

and 2015.

· Various government incentives coupled with private sector initiatives are

projected to drive the sales of Indian gems and jewellery sector at a

CAGR of around 34% from 2007-08 to 2012-15.

· The organized gems and jewellery sector is anticipated to grow rapidly in

near future, accounting for nearly 24% of the total gems and jewellery

market by 2012-14.

· Various factors like cheap labor cost, better designs and manufacturing

practices, are making the country an attractive destination for cutting and

polishing of diamonds.