The week from hell, $1300 Gold

After this week, I can’t even imagine Gold at $1350 or $1400. It is now becoming my latest obsession in predicting when everyone is going to fold and sell of their gold jewelry.

I am doing my best to keep up with the constant flow of customers. With silver nearing $22 I am getting 5 times more than average. Yesterday alone I smelted about 25 lbs of sterling. I think if silver hits $30 then I will be getting about 50 lbs per day.

I believe that silver has some catching up to do, and if we learn anything from the relationship that gold and platinum previously held, then silver over the next 3-5 years will do nothing but go up. It can easily hit the low hundreds, or even several hundreds per ounce if it grows to it’s prior gold-silver ratios of 16:1

I am also considering adding copper and brass to our charts and start buying them too. Time to order a larger scale……..That’s it for now.


Your Vote Counts, really?

Looks as though these damn political races are getting closer and closer. I will say watching these commercials and ads for them makes me sick. It really puts in perspective how out of touch our political system and politicians are. I predict it will take 2-3 more election cycles before the American Public puts an end to the electorate college and 2 party system. I think politicians need to really focus on the people who voted, and did not vote, for them. Enough with the alliances who typically elect to adopt wasteful policies and PAC initiatives. We really need individuals with new ideas and maybe even some riskier ones. Congress really needs to review it’s policies on prohibition, immigration, job outsourcing, and the ever widening trade gaps. Unfortunately, the war on drugs has been lost and remains a burden on taxpayers, the outsourcing of jobs is killing our economy, the tradegap is providing ammunition to countries that really don’t like Americans, and immigration is tearing us apart even further. I still never have understood why we don’t just bring our troops home and take Mexico. Their own government is more corrupt then ours by tenfold. We could surely benefit from it’s skilled and hard working labor, not to mention it’s resort qualities and vast resources.

I think the biggest change we need to make is to eliminate the electorate college. It was designed for the 1800’s, but is now a huge deficit. Every vote should count. We now have the internet and constant media coverage and every person should have an individual voice when it comes to voting.

So, enjoy your day at the polls and don’t rule out the independant’s as they are probably some of the more forward thinking of the bunch.

Remember what I say, individual assholes are a better choice than an entire group of assholes! (I apoligize for the inappropriate, or very appropriate, language)

$1500 Gold?

It looks as though $1300 has passed the price test and $1500 is the next big price barrier……..I would have to utilize reasonable judgement to say that the political hardships we face as a country will begin to reveal themselves again after the November elections. Congress has already withdrawn their session so I do not expect alot will happen from now to then that will inspire a $200 price increase. 2011 should be the year for gold to reach 1980’s levels, spi adjusted of course, anywhere from $1500 upwards of $2500, depending on how low the dollar gets. Gold has really proved itself lately around the globe as a currency. Banks will still play a huge role in keeping the demand and prices up, but we will also see a surge in consumer buying as well. Even pensions are now adding gold into their portfolios…..2011 will be the year to watch for the yellow metal……save an ounce or two or alot more if you can!

What’s the “Deal’ with Diamonds??

So if you’ve tried to sell a diamond recently, you are probably thinking you’d have an easier time selling help wanted signs. It is no easy task. The offers you probably received left you running for the door of it’s shop keeper. You keep looking back at your appraisal and it definitely says it would cost $10,000 to replace so why are you only getting offers below $2000?

The first thing you need to understand is that the diamond market is similar to all other markets in that supply and demand regulate prices. At times, supply and demand are way out of balance and now is one of those times. You see it in markets across the boars from cars and trucks to real estate and travel. I would guess that with the lack of available credit and good paying  jobs that the recovery is going to be calculated over a decade, not years and definitely not next year. I’m no analyst but it is pretty easy to read the loss of jobs and big government tabs have lead us into a grim economic period. Maybe it is just a natural cycle of expanding and contracting but I would also guess that the loss of jobs to foreign competitors is taking it’s toll.

Will there ever be another time in your life when your willing to spend $10,000 on a rock? Maybe or Maybe not, but there are other factors besides the lack of demand that have brought the diamond market way down. Mining has increased in productivity as new technology and new approaches to mining have unearthed far more and far better diamond rough than ever before. Diamond mining and manufacturing in the past was mostly controlled by DeBeers and when sales were slow, they simply stopped manufacturing diamonds to stabilize prices.

Now, we have so many competing diamond mines that there is almost too much supply even for an ideal market.

So how does all of this come into play when you are simply trying to sell your diamond? For one, wholesale prices have more than halved in the past couple years. While retail prices have not come down, jewelers simply make more on the sales they are able to make and it helps offset the decrease in sales volume.

With the markup from wholesale to retail being 300 to 600%, it starts to paint the picture that you are not buying a diamond as an investment. Those days are long gone. Investments are merely risks and I would guess that most “Investments” ultimately become certain losses. If everything made money, we’d all be rich, but that is not the case.

To put is simply, once you buy your diamond and sign the receipt, you instanly lose half to two thirds of your investment, maybe more.

The next thing you need to know is that in the past 5 years, the diamond market has changed vastly. First, there is the technology of treating diamonds. Diamonds are now commonly laser treated to remove visible inclusions, then filled with a liquid that has a refractivity similar to a natural diamond you it appears to look as that. Next, there is High Pressure Heat Treatment which can enhance a diamonds color and increase it’s clarity slightly. Beyond that, there are treatments such as bleaching, radiation, and more.

The single most important change in the diamond market has been cutting or manufacturing technology. There is a science applied to cut quality and proportions now. In the past, is was not as relevant as there were not many standards and alot of diamond dealers did not focus on this factor. Now, it is a very important characteristic. A diamond will not perform properly if it is cut wrong and that is a big value factor. Many older diamonds were cut without this in mind and thus do not appear as brilliant as they should because they do not reflect light the way they should. In fact, you may have a diamond that is cut to make a certain weight but all together does not face up to appear to be that size. For example, I see many 1 Carat diamonds that are less than 6.5mm in diameter. A 1 carat, as a standard, must be at least 6.5 mm from girdle to girdle or it will appear as a 5/8 carat diamond. Your diamond has to look the part so if in the past you bought a 2 carat that looks like a 1.5 carat, expect to get paid far less than you would had you bought a diamond with excellent proportions and symetry.

Another common yet unknown value factor is flourescense. About 1/3 of all diamonds have the presence of the mineral boron in their structure. This causes a diamond to appear oily or possibly cloudy. Expect a deduction of 10 percent up to 30 percent depending on the range of flourescense. Very heavy blue flourescense diamonds are typically far more yellow or brown than they appear, as blue naturally blocks yellow from the human eye.

I know this is all very technical and tricky, but that is how the diamond market is. I hear all too often people say “my jeweler told me my diamond was flawless or perfect” and I am troubled by this. There are standards for all factors in the diamond industry and if you are not aware of these, your jeweler or broker should responsibly relay that information to you so you can make the right choice when buying or selling a diamond. I always suggest you have a diamond certified by GIA when buying or selling, that way you have the facts about that diamonds characteristics. With a GIA certification, you can easily and accurately value a diamond.

Be wary of certifications by other companies, GIA is very accurate and reliable. Other certifications are often less strict. Additionally, never accept a jewelers appraisal as a certification when buying or selling a diamond. Jewelers often are not qualified to properly grade a diamond and are not an unbiased examiner. Especially where a diamonds market value is concerned. Jewelers will tell you a diamond is worth 10,000 dollars, yet you will not be able to get 1500 dollars for the diamond. Appraisals are simply BS and are for insurance purposes only, which, as many of you know, insurance is BS too.

So, welcome to the diamond market, It is 70% fraud. Try and stay in the other 30% and you might just be ok.