The World Financial Report

World Financial Report – April 18th, 2019

Radio Show Newsletter

WORLD FINANCIAL REPORT ON RADIO APRIL 18th 2019
RARECOLOREDDIAMONDS.COM

CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: College Kids Are Living Like Kings in Vancouver’s Empty Mansions. Globe-trotting landlords can avoid vacancy taxes by renting. It’s the latest twist for a housing market down 8.5% from its peak. Isaiah Boodhoo, 22, thought it was a “complete hoax” when he saw a rental listing on Facebook for a bedroom in a Vancouver mansion for only C$1,100 ($825) a month. It turned out the glass chandeliers, luxurious blue drapes, steam room and billiards table were for real.

The nine-bedroom home, dubbed “The Castle” by the 14 students who share the property, is apparently owned by an Afghani pop artist, according to Boodhoo. “Honestly, I would stay here for as long as I could,” he said, sitting on a white couch while sipping from a Slurpee cup. “$1,000 bucks for all this?” Others may also soon find themselves as lucky as more mansion owners in the city turn to renting to avoid a new tax on empty homes. In the new world of Vancouver’s housing market, where Chinese investors are decamping and low-ball offers are the norm, students can find themselves living in the lap of luxury. Bloomberg

-CHART OF THE WEEK: Canadian Inflation Picks Up in March on Surging Gasoline Prices. Canadian annual inflation accelerated in March on the biggest one-month increase in gasoline costs in a decade, bringing price pressures back up near the Bank of Canada’s target. Annual consumer price inflation rose to 1.9 percent from 1.5 percent in February, Statistics Canada said Friday from Ottawa. The number was in line with analyst expectations. Core measures seen as a better gauge of underlying prices also ticked up to 1.97 percent, from 1.9 percent, and came in much stronger than the 1.8 percent anticipated by economists. Bloomberg

-CHART OF THE WEEK: $4 Trillion Stock Rally Has Buyers Flooding World’s Largest ETF. The S&P 500 has grown by $4 trillion since its December meltdown, and exchange-traded fund investors are betting there may be more room to run. Investors poured more than $5.6 billion into the SPDR S&P 500 ETF Trust, known as SPY, last week, data compiled by Bloomberg show. The last time the world’s largest ETF saw inflows of this magnitude, U.S. stocks were on the cusp of a bear market in late 2018. But this time around, the cash infusion comes as the benchmark nears new highs. Bloomberg

-CHART OF THE WEEK: A Bearish Warning Sign Is Flashing for the Dollar. Hedge funds and money managers have become the most bearish in a year on the dollar’s near-term outlook, according to one of the foreign-exchange market’s most watched gauges of sentiment. In options markets, protection against a falling greenback is getting more expensive. Risk reversals, an indicator of market bias and option positioning, show investors have begun paying more for puts on the dollar than for calls versus the euro, and its other major peers. Not since April 2018 have benchmark puts cost more than calls. While the turnabout stems in part from the Federal Reserve’s recent dovishness, Banque Lombard Odier & Co.’s Vasileios Gkionakis said the shift reflects fresh optimism on the world’s economy and foreign commerce. Bloomberg

-CHART OF THE WEEK: Maple Leafs Fans Pay Big for Chance of Stanley Cup Glory. Toronto Maple Leafs followers have a reputation for being hopeless fanatics. Now there’s data to prove it. Comparing ticket prices for various teams in the National Hockey League playoffs, which began this week, with the odds of those teams winning the Stanley Cup shows fans in Canada’s biggest city are paying the highest prices for a relative long shot. According to Chicago-based online ticket seller Vivid Seats, long-suffering Leafs fans are forking out a median price of $475 per ticket for a chance to see their team hoist the Cup for the first time since 1967. Bloomberg

-French President Emmanuel Macron vows to rebuild Paris’ Notre Dame after devastating fire. The massive fire that ripped through Paris’ Notre Dame Cathedral, collapsing the roof and spire, was likely sparked accidentally, prosecutors say. President Emmanuel Macron vowed to rebuild the heavily damaged symbol of France. As investigators look into what started the fire, a drive to rebuild the cathedral has already received more than $700 million in pledges, according to Reuters. CNBC

-Economic growth won’t last as the U.S. labors under the burden of growing entitlement programs and weakness around the world, former Federal Reserve Chairman Alan Greenspan told CNBC. The long-time central bank chief repeated his warnings about the weight that Social Security, Medicare and other programs are having on what have been otherwise solid gains over the past few years. “I think the real problem is over the long run, we’ve got this significant continued drain coming from entitlements, which are basically draining capital investment dollar for dollar,” he told CNBC’s Sara Eisen during a “Squawk on the Street ” interview. “Without any major change in entitlements, entitlements are going to rise. Why? Because the population is aging. There’s no way to reverse that, and the politics of it are awful, as you well know,” Greenspan added. While he said the economy looks “reasonably good” in the short run, he expects that over the longer term, growth “fades very dramatically.” CNBC

-There is too much debt floating around the world and China is a big reason why, World Bank President David Malpass said Thursday. “There are challenges facing the world in terms of how do you have transparent projects that are high quality, where the debt is transparent. China moved so fast that in some part of the world there is just too much debt,” Malpass told CNBC’s Sara Eisen on “Squawk on the Street. ” “That’s something that we can work on with China.” China has lent trillions of dollars to other countries, including the U.S. As of January, China owns $1.12 trillion in U.S. Treasurys, according to data from the Treasury Department. CNBC

-The average price of a Canadian home sold last month was $481,745, a figure that has fallen by 1.8 per cent in the past 12 months, the Canadian Real Estate Association says. The group that represents realtors says that prices were lower, on average, and the number of homes sold was also down by 4.6 per cent compared to March of last year. Spring is typically the busiest time of year for home sales, a trend that sometimes starts as early as March, but this year was the weakest March for home sales since 2013. “Many prospective home buyers remain sidelined by the mortgage stress-test to varying degrees, depending on where they are looking to buy,” CREA president Jason Stephen said. CBC

-One of Canada’s largest banks is calling on the federal government to reconsider controversial new mortgage rules, as the transfer of risk to unregulated lenders potentially makes the market riskier than it appears. The introduction of a 200 basis-point stress test on new mortgage lending as part of the so-called B-20 regulations accounted for as much as 60 percent, or C$15 billion ($11 billion), of the C$25 billion decline in new mortgage originations last year, according to Toronto-based Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce. While the new rules had the desired effect of improving overall credit quality, it has also led more borrowers into the unregulated sector for financing, resulting in a significant market-share increase for alternative lenders, Tal wrote. Bloomberg

-Global fund managers are the gloomiest on growth in nearly three years, with 66% expecting below-trend growth and low inflation, according to a Bank of America Merrill Lynch survey. The managers also do not see a recession until at least the second half of next year, and a majority expect the Fed to be at the end of its interest rate hiking for the cycle. The most crowded trade is betting against or shorting European stocks, while the second most crowded is going long large-cap U.S. and Chinese growth names like Amazon, Netflix, Alphabet, Alibaba and Baidu. CNBC

America has too many stores. This year, US retailers have announced that 5,994 stores will close. That number already exceeds last year’s total of 5,864 closure announcements, according to a recent report from Coresight Research. Bankruptcies in the retail sector are piling up and chains have aggressively closed under-performing stores. That has led to an uptick in store closures this year. Payless, Gymboree, Charlotte Russe and Shopko have all filed for bankruptcy this year and will close a combined 3,720 stores, according to the report. The majority of those are because of Payless, which filed for its second bankruptcy in February and said at the time it would shutter 2,100 stores in the United States.

Other retailers, such as Family Dollar, GNC, Walgreens, Signet Jewelers, Victoria’s Secret and JCPenney, are struggling and are shrinking their store footprints to save money. Family Dollar will close 359 stores this year, while Signet Jewelers, the parent company of mall stalwarts Kay, Jared and Zales, will close 159. Even thriving retailers such as Target and Walmart are quietly closing a handful of their stores although those companies are opening some, too. And department stores such as Nordstrom, Kohl’s and Macy’s are shuttering a few stores each.

Thousands more store closings could be on the way in the coming years as online shopping replaces purchases at physical stores. “The flood of store closures will likely continue for quite some time,” said Coresight Research CEO Deborah Weinswig. Online sales make up around 16% of retail sales today, but they will rise to 25% by 2026, UBS analysts estimated in a research report last week. That could force up to 75,000 stores to close by 2026, including more than 20,000 clothing stores and about 10,000 consumer electronics stores, UBS estimates. Thousands of home furnishings and sporting goods stores will also need to close as online shopping grows rapidly. Read more here-https://cnn.it/2Dflfs8

-Media giant Disney announced its new video streaming platform and Netflix competitor, Disney+, last week. Its stock went up by as much as as 12% and enjoyed its best day since May 2009. Its current stock price is hovering around $130 a share. And if you invested in the company 10 years ago, you would have made a profit: A $1,000 investment on April 15, 2009, would be worth more than $7,600 as of April 15, 2019, a total return over 660%, according to CNBC calculations. Over the same period of time, the S&P 500 was up 240%. Disney’s chairman and chief executive officer, Bob Iger, told CNBC that he was “optimistic” about the streaming service “because of the content, because of the user interface and because of the price.” Read more here-https://cnb.cx/2UDuPzI

-All eyes are on video-streaming giant Netflix, which faces new competition from Disney’s highly anticipated streaming platform,Disney+, as it reported itsfirst-quarter earnings Tuesday. Its stock fell more than 1%, with its current price at about $360 a share. Still, investing in early 2007, when Netflix first began streaming, would have proved to be a good bet. A $1,000 investment made on Jan. 15, 2007, would be worth more than $110,000 as of April 16, 2019, according to CNBC calculations, fora total return of about 10,000%. Over the same period, the S&P 500 was up just over 100%. While the company’s stock took a slight dip Tuesday, it reported quarterly revenue that beat estimates and shares are up more than 30 percent year to date. Many investors relayed optimistic messages early this week. In a note, analysts at banking firm KeyBanc seemed skeptical that new streaming competition could pose a significant threat. Read more here-https://cnb.cx/2VSAGOo

-Of the 150,272,157 tax returns filed for the 2016 tax year, 50,219,667 or 33.4 percent were classified by the Internal Revenue Service as “non-taxable returns,” meaning the people who filed them paid $0 or less in income taxes, according to data published by the Statistics of Income Division of the IRS. At the same time, 80 percent of all income taxes paid that year were paid by tax return filers who had adjusted gross incomes of $100,000 or more. Read more here-http://bit.ly/2DgDmOh

-Incumbent presidents tend to have a “built-in advantage” of 5 to 6 percentage points in the popular vote, according to the Goldman chief economist Jan Hatzius and his team. A stronger economy under Trump administration is also adding to his edge headed into the 2020 election, Goldman says. Trump could still win the re-election fight even with a negative net approval rating. CNBC

-Alberta became the third major province in Canada over the past year to elect a conservative-leaning government in a growing front of opposition to Prime Minister Justin Trudeau’s liberal vision for the country. The United Conservative Party, founded in 2017 as a merger of two right-of-center groups and led by former federal cabinet minister Jason Kenney, won a majority of legislative seats in the oil-rich province. His victory over New Democratic Party Premier Rachel Notley restores the status quo in a province that until her 2015 victory had a decades-long run of conservative leaders. The UCP was leading or had won 63 seats, versus 24 for the NDP, according to the latest preliminary results on Wednesday.

The trend, which has also seen conservatives elected in Ontario and Quebec, threatens to check Trudeau’s Liberal Party agenda just as the prime minister prepares to face the electorate himself later this year, trailing in the polls. His new rivals are pushing back on everything from Trudeau’s introduction of a nationwide carbon pricing regime to his support of immigration, globalization and a more assertive role for the federal government. “When Justin Trudeau was first elected, he looked around the table at premiers and he saw a lot of friendly faces,” said Nik Nanos, chairman of Nanos Research Group, a polling company. “That’s all out the window.” Bloomberg

-Canadian farmers shouldn’t look to China for any recovery in canola sales as more stringent quality checks by the Asian country are set to take a heavy toll on imports in coming months. Overseas purchases by China, the North American country’s top buyer, will drop “significantly” after it stepped up quality inspections on cargoes from Canada, Tang Ke, a department director at the Agriculture Ministry, said on Wednesday. Ties between the two nations have deteriorated after Canada detained a Huawei Technologies Co. executive in December at the behest of the U.S., drawing China’s wrath.

Since then, China has detained Canadians on national security grounds, and revoked canola import licenses, citing pest infestations. The world’s top commodity consumer is hitting Canada where it hurts most. Canola is as Canadian as maple syrup, its name a contraction of “Canada” and “ola.” Prime Minister Justin Trudeau says his country’s product is top quality, and he plans to use diplomatic channels to resolve the ruckus, while the government is also considering an aid package for canola farmers.

Though China has maintained that the drop in purchases is due to quality control issues, industry groups and Canadian executives say the restrictions are likely less about pests and more about the feud surrounding Huawei. Benchmark futures for canola, also known as rapeseed, have tumbled almost 5 percent in North America this year, while rapeseed oil prices in China have jumped nearly 10 percent. The drop in canola imports will have little impact on edible oil supplies in China, Tang said, adding there is ample availability of alternative oilseeds. Bloomberg

-Tiger Woods collected his 15th major win, and his fifth Masters, at the 2019 Masters Tournament on Sunday. The 43-year-old hadn’t won a major championship since 2008, when he triumphed at the U.S. Open. Besides donning the coveted green jacket, Woods earned a sizable paycheck: $2.07 million, which is the standard 18 percent of the total pot. When Woods won the tournament in 2001 and earned $1 million, he became the first winner to earn seven figures. Now, he’s the first Masters champion to earn more than $2 million. The total payout hit a record high of $11.5 million, up from $11 million in 2018. The prize money, which is split among the 87-player field, is distributed depending on final rank.

Here’s how it would normally get divvied up between the top eight finishers:

First place: $2.07 million (18% of the total purse)
Second place: $1.24 million (10.8% of the total purse)
Third place: $782,000 (6.8% of the total purse)
Fourth place: $552,000 (4.8% of the total purse)
Fifth place: $460,000 (4% of the total purse)
Sixth place: $414,000 (3.6% of the total purse)
Seventh place: $385,250 (3.35% of the total purse)
Eighth place: $356,500 (3.1% of the total purse)

This year, however, there was a three-way tie for second place, meaning Dustin Johnson, Xander Schauffele and Brooks Koepka will take home $858,667 each. There was also a four-way tie for fifth place, meaning Jason Day, Webb Simpson, Francesco Molinari and Tony Finau earned $403,938 each. Read more here-https://cnb.cx/2UpStus

-The Seattle Seahawks and Russell Wilson have reached agreement on a four-year, $140 million extension that includes a $65 million signing bonus and makes the quarterback the highest-paid player in the NFL, a source told ESPN’s Adam Schefter on Tuesday morning. The four-year extension, which was signed and announced on Tuesday, keeps the 30-year-old Wilson with the Seahawks through the 2023 season. ESPN

-The 123rd Boston Marathon took place Monday, April 15. Worknesh Degefa of Ethiopia dominated the women’s race from the start. She ran the last 20 miles of the 26.2 mile course alone before crossing the finish line in a winning time of 2:23:31. The men’s race came down to the last few yards: Lawrence Cherono of Kenya just barely won, inching past Lelisa Desisa of Ethiopia to break the tape with a time of 2:07:57. Besides the pride that comes with winning the oldest annual marathon in the world, and one of the most prestigious, Degefa and Cherono both earned $150,000 in prize money. CNBC

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RARECOLOREDDIAMONDS.COM

-Twin Blue Diamonds Fetch $7M at Christie’s. Christie’s New York Magnificent Jewels auction garnered $30.3 million on Tuesday, with a twin-stone ring leading the sale. The piece, bearing two pear modified brilliant-cut, fancy-vivid-blue, VS2-clarity diamonds weighing 3.06 and 2.61 carats, fetched $6.7 million, or $1.2 million per carat. Its presale estimate was $6 million to $8 million. Christie’s sold six additional lots for more than $1 million each, among them a rectangular-cut, 16.33-carat, D-color, VVS1-clarity, type IIa diamond ring with the potential to be internally flawless.

The jewel sold for $1.6 million, achieving $96,500 per carat. Its presale valuation was $1.2 million to $2.2 million. A marquise-cut, D-color, VVS2-clarity, type IIa diamond ring weighing 16.69 carats fetched $1.5 million. The piece, from the collection of Elizabeth Stafford, duchess of Norfolk, had an estimate of $1.2 million to $1.8 million. Other notable lots included an oval-cut, 6.11-carat, fancy-pink diamond ring, which fetched $230,000 per carat. It achieved a total price of $1.4 million, falling within its estimate of $1.2 million to $1.5 million. Read more here-http://bit.ly/2XjsUgw

-Christie’s $30-Million Sale Includes $6.7-Million Blue Diamond Ring And Pieces By Bulgari, Cartier. The Christie’s New York sale of Magnificent Jewels on April 16 exemplified the solid investment value of fancy colored diamonds and signed pieces by big name brands. The top lot in the sale, which totaled $30,315,875, was a $6.7-million rare blue diamond ring, followed by five other diamond rings that each sold in excess of $1-million. The top price paid at the auction was for a ring set with two rare fancy blue diamonds of 3.0 and 2.61 carats. It sold for $6,744,500, over a pre-sale estimate of $6-8-million. Read more here-http://bit.ly/2Zl57yz

-Christie’s New York Magnificent Jewels Auction. April 16 2019, New York City. Auction Info Here-http://bit.ly/2ZhKbbR

-Lot 276: AN EXCEPTIONAL TWIN-STONE COLORED DIAMOND RING. Fancy vivid blue pear modified brilliant-cut diamonds of 3.06 and 2.61 carats, platinum, ring size 6. GIA, 2018, report no. 11993126: 3.06 carats, Fancy Vivid Blue, natural color, VS2 clarity. GIA, 2018, report no. 11890077: 2.61 carats, Fancy Vivid Blue, natural color, VS2 clarity. Estimate 6,000,000-8,000,000. Price realised 6,744,500. See more here-http://bit.ly/2PgQmrS

-Lot 250: COLORED DIAMOND AND DIAMOND RING. Fancy pink oval modified brilliant-cut diamond of 6.11 carats, circular-cut diamonds, platinum and 18k rose gold, ring size 5 ¾. GIA, 2019, report no. 5141867331: 6.11 carats, Fancy Pink, natural color, VVS1, Type IIa. Estimate 1,200,000-1,500,000. Price realised 1,395,000. See more here-http://bit.ly/2Ule1IQ

-Lot 239: COLORED DIAMOND RING. Fancy intense yellow cut-cornered rectangular mixed-cut diamond of 37.65 carats, platinum and 18k gold, ring size 6 ¾. GIA, 2019, report no. 11191532: 37.65 carats, Fancy Intense Yellow, natural color, VS1 clarity. Estimate 600,000-800,000. Price realised 1,005,000. See more here-http://bit.ly/2IEScBD

-Lot 240: COLORED DIAMOND PENDANT. Fancy intense yellow cushion modified brilliant-cut diamond of 35.06 carats, 18k gold, 1 1/8 ins. GIA, 2019, report no. 12019990: 35.06 carats, Fancy Intense Yellow, natural color, SI1 clarity. Estimate 500,000-700,000. Price realised 705,000. See more here-http://bit.ly/2Pg5F4k

-Lot 252: COLORED DIAMOND RING. Fancy yellow cut-cornered rectangular modified brilliant-cut diamond of 12.26 carats, yellow pear-shaped diamonds, 18k gold, ring size 5 ¼. GIA, 2019, report no. 11744649: 12.26 carats, Fancy Yellow, natural color, VS1 clarity. Estimate 100,000-150,000. Price realised 150,000. See more here-http://bit.ly/2v96Yc3

-Lot 201: COLORED DIAMOND AND DIAMOND RING. Fancy intense yellow-green cut-cornered square modified brilliant-cut diamond of 2.22 carats, two fancy pinkish purple pear-shaped diamonds of 0.48 and 0.45 carat, two fancy light purplish pink pear-shaped diamonds of 0.65 and 0.50 carat, fancy light pinkish purple pear-shaped diamond of 0.45 carat, fancy purple-pink pear-shaped diamond of 0.31 carat, fancy purplish pink pear-shaped diamond of 0.37 carat, light pink pear-shaped diamond of 0.52 carat, light purple pear-shaped diamond of 0.32 carat, circular-cut diamonds, 18k white gold, ring size 5 ¾. Estimate 100,000-150,000. Price realised 112,500. See more here-http://bit.ly/2Uq8jFE

-Lot 107: COLORED DIAMOND AND DIAMOND RING. Fancy yellow cut-cornered rectangular modified brilliant-cut diamond of 9.04 carats, baguette, radiant and circular-cut diamonds, platinum and 18k rose gold, ring size 8. GIA, 2018, report no. 6194914441: 9.04 carats, Fancy Yellow, natural color, VS2 clarity. Estimate 70,000-100,000. Price realised 93,750. See more here-http://bit.ly/2KKbU1C

-Lot 259: COLORED DIAMOND AND DIAMOND RING, GRAFF. Fancy vivid yellow cut-cornered square step-cut diamond of 3.55 carats, baguette-cut diamonds, platinum and gold, ring size 4 ¾, signed Graff, blue Graff case. GIA, 2019, report no. 13332719: 3.55 carats, Fancy Vivid Yellow, natural color, SI1 clarity. Estimate 60,000-80,000. Price realised 68,750. See more here-http://bit.ly/2UpaMA7

-Lot 143: DIAMOND RING. Pear modified-brilliant shaped diamond of 5.04 carats, pear and circular-cut diamonds, 18k gold and white gold, ring size 8. GIA, 2019, report no. 2201133089: 5.04 carats, Y-Z color, VS1 clarity. Estimate 20,000-30,000. Price realised 32,500. See more here-http://bit.ly/2V1qmX2

-Lot 60: COLORED DIAMOND RING. Fancy light yellow marquise brilliant-cut diamond of 10.50 carats, 18k gold, ring size 6. GIA, 2019, report no. 2201039045: 10.50 carats, Fancy Light Yellow, natural color, SI2 clarity. Estimate 50,000-70,000. Price realised 60,000. See more here-http://bit.ly/2Di20xW

-Lot 129: A WHIMSICAL ART DECO ENAMEL AND GOLD ‘SNOW WHITE AND THE SEVEN DWARFS’ CHARM BRACELET, CARTIER. Variously-colored enamel charms depicting Disney’s Snow White, Doc, Grumpy, Happy, Sleepy, Dopey, Bashful and Sneezy, 14k gold, 7 5/8 ins., circa 1937, each charm signed Cartier or WDENT for Walt Disney Enterprises. Estimate 15,000-20,000. Price realised 118,750. See more here-http://bit.ly/2UoQx5t

-Sotheby’s Magnificent Jewels Auction. April 17 2019, New York City. Auction Results Here-http://bit.ly/2IpEB1T

-Lot 139: An Important Fancy Intense Blue Diamond and Diamond Ring. Set with a cut-cornered square modified brilliant-cut Fancy Intense Blue diamond weighing 3.24 carats, flanked by two pear-shaped diamonds weighing 0.58 and 0.54 carats, further embellished with round diamonds, size 6¼. Estimate 2,500,000-3,000,000. LOT SOLD 2,300,000. See more here-http://bit.ly/2GoQVft

-Lot 63: Fancy Vivid Yellow Diamond and Diamond Ring. Set with an emerald-cut Fancy Vivid Yellow diamond weighing 5.66 carats, flanked by two triangle-shaped diamonds, size 6¼. Accompanied by GIA report no. 6192799745 dated October 30, 2018 stating that the diamond is Fancy Vivid Yellow, Natural Color, VVS1 clarity. Estimate 125,000-175,000. LOT SOLD 275,000. See more here-http://bit.ly/2DkASP1

-Lot 138: Fancy Intense Yellow Diamond and Diamond Ring. Set with an emerald-cut Fancy Intense Yellow diamond weighing 8.88 carats, flanked by two half-moon-shaped diamonds, size 5¾. Accompanied by GIA report no. 5191638967 dated September 5, 2018 stating that the diamond is Fancy Intense Yellow, Natural Color, VS2 clarity. Estimate 150,000-175,000. LOT SOLD. 187,500. See more here-http://bit.ly/2IK0mIW

Botswana Unveils 20ct. Okavango Blue Diamond. Okavango Diamond Company has revealed a 20.46-carat polished stone, the largest blue diamond to come out of Botswana. The Gemological Institute of America (GIA) has graded the oval brilliant-cut, type IIb diamond as fancy deep blue, with VVS2 clarity, ODC said. “From the first moment we saw the diamond, it was clear we had something very special,” Marcus ter Haar, managing director of ODC, said Wednesday.

“Everyone who has viewed the 20-carat polished diamond has marveled at its unique coloration, which many see as unlike any blue stone they have seen before. It is incredibly unusual for a stone of this color and nature to have come from Botswana a once-in-a-lifetime find, which is about as rare as a star in the Milky Way.” The stone cut from a 41.11-carat rough was recovered from the Orapa mine, belonging to Debswana, a joint venture between De Beers and the government of Botswana. ODC, based in Gaborone, has access to 15% of Debswana’s run-of-mine production. The Okavango Blue, named after Botswana World Heritage site, the Okavango Delta, will be showcased over the coming months before going up for sale at the end of the year. Read more here-http://bit.ly/2PhesD5 and https://abcn.ws/2Ximuyb

-One of the largest diamonds in the world is now for sale. In the market for a piece of statement jewelry? Would 302.37 carats of diamond be enough of a statement for you? Graff Diamonds announced Wednesday that the largest square emerald cut diamond in the world is available for sale. The price was not disclosed. The finished stone, named Graff Lesedi La Rona, is the principal diamond from the 1,109 carat Lesedi La Rona rough diamond found in 2015 in Botswana. Lucara Diamond Corp. sold the Lesedi La Rona to Graff Diamonds for US$53 million a cool US$47,777 per carat in 2017. The sheer size of the diamond posed a challenge for the Graff gemologists tasked with analyzing, cutting, and finishing the stone: It was too big for their equipment.

A new scanner had to be built specifically for this rough diamond; it is equipped with specialized imaging software to map the stone and determine what kind of cut would lead to the largest, most brilliant diamond. The entire process took more than 18 months, according to the company. “Cutting a diamond of this size is an art form, the ultimate art of sculpture,” Laurence Graff, founder of Graff Diamonds, said in a statement. “It is the riskiest form of art, because you can never add and you can never cover up a mistake; you can only take away. You have to be careful and you have to be perfect.” In addition to the Graff Lesedi La Rona, 66 “satellite” diamonds resulted from the rough stone. The siblings range from less than a carat to more than 26 carats. Read more here-http://bit.ly/2GdBo1K

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GOLD-SILVER-PLATINUM-PALLADIUM

Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00

Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57

Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33

Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

-Global silver demand up 4% in 2018. The Silver Institute has released a report saying global silver demand rose 4% to 1.03 billion oz. in 2018. This is the first time since 2015 that demand has risen year-over-year. Three factors were at play: demand growth, robust retail investment, and falling supply. On the demand side, sales of silver bars and coins rose by 20%, the largest driver was silver bar demand, which jumped 53%. Silver jewelry demand moved up 4%, to 212.5 million oz. Demand for industrial silver fell 1% to 578.6 million oz., due to a 9% drop in silver used in photovoltaic. Silver supply fell by 2% last year, the third consecutive annual decline to 855.7 million oz.

The largest downturn was experienced by primary silver mines, which decreased by 7% to contribute 26% of total mine supply. The zinc-lead sector contributed 38% of by-product silver, followed by copper at 23% and gold at 12%. The price of silver also declined by 7.8% to average $15.71 in 2018. Negative factors affecting the price last year included a rising US dollar, interest rate hikes, the trade dispute between the United States and China, and lower global economic growth projections. Read more here-http://bit.ly/2ZfGrru

The Silver Institute World Silver Survey. Read more here-http://bit.ly/2KFQ5jD

-South African Gold Output Has Longest Losing Streak Since 2009. South African gold production shrank for a 17th straight month in February, the longest string of contractions since the financial crisis. Gold output fell 21 percent from a year earlier compared with a revised 23 percent drop in January, Pretoria-based Statistics South Africa said in a statement on its website Thursday. Production contracted for 29 months through January 2009. Read more here-http://bit.ly/2XeAZTK

Key Insights

-What If “Whatever It Takes” Isn’t Enough? Reasons to buy gold and precious metals mining stocks have been numerous for many years. Rarely, however, have so many of these considerations been as timely as now. To summarize, and connect as many dots as possible in a brief note, here are ten that come to mind.

  1. US fiscal situation is dreadful and promises to worsen

  2. Rising populism

  3. Positive supply and demand fundamentals

  4. Global economy weakening

  5. Monetary policy turning dovish globally

  6. Inflation is rising

  7. Gold is undervalued and unloved

  8. Gold has gone through a multi-year correction/base-building process

  9. Gold is a proven diversifier, risk mitigator, and capital protector

  10. Outlier/Systemic Risks

Fiscal-Debt to GDP slightly exceeds 100%. At the 100% threshold, the math becomes increasingly difficult for GDP growth to outpace debt growth. It is a foot race that has and will almost always be won by debt. For a full discussion of relevant dynamics, please see our website article “Going Bananas.” The investment implication is for potential slippage in the US credit rating, which could lead to an unwelcome and uncontrolled rise in interest rates. Connecting the dominoes, a weak USD could topple current historically high valuations of financial assets. We believe that there will be increasing investor focus on this issue as the 2020 elections approach. Read more here-http://bit.ly/2v92tOM

Greg Hunter: Bill Holter, Gold & Silver Will Survive Whole System Burning Down. Financial writer and precious metals expert Bill Holter is “not worried at all” about the current price smash down for precious metals. Holter says, “We live in a world where all liabilities are more than all liabilities in history. This whole system is going to come down. If you see a house burn down, the only thing left is the foundation. That’s the only thing left because the foundation doesn’t burn. That’s what gold and silver are, and that’s what’s going to be left when this house of financial cards burns down.” Read more here-http://bit.ly/2Zj4GVr

-Adam Hamilton: Gold-Bull Breakout Potential. The bottom line is this gold bull now has the highest major-upside-breakout potential of its entire lifespan. This latest gold upleg fueled by gold-futures buying hasn’t matured yet, as speculators’ long positioning remains quite low. For the first time in this bull, gold is already consolidating high around $1300 before most of the likely gold-futures long buying has run its course. That makes an assault on $1350 very likely. If gold can break decisively above that multi-year resistance and start forging new bull-market highs, its psychology will greatly improve. Investors will take notice and start buying again, driving gold higher and fueling mounting bullishness. The gold miners’ stocks will be the biggest beneficiaries of new bull-market gold highs. Their stocks soared the last time investors were excited about this gold bull, rapidly multiplying wealth. Read more here-http://bit.ly/2IE252H

-Venezuela Sells $400 Million in Gold Amid Sanctions, Sources Say. Venezuela sold about $400 million in gold despite a growing international push to freeze the country’s assets, according to two people with knowledge of the matter. The amount, which would equal almost 9 tons, was reflected by a drop in the bank’s total reserves, which fell to $8.6 billion on April 12, according to data provided by the central bank. About $5.1 billion of that is gold. A central bank press official didn’t immediately respond to requests for comment on the sale Monday.

The sale could mean President Nicolas Maduro has found a way to skirt the economic blockade. Maduro has blown through reserves, selling gold to firms in the United Arab Emirates and Turkey, as sanctions increasingly cut off his authoritarian regime from the global financial system. While he maintains a stranglehold on power on the ground including the military and government bureaucracy opposition leader Juan Guaido is using support from dozens of countries to slowly seize Venezuela’s financial assets abroad. The U.S., which recognizes Guaido as the nation’s rightful leader, sanctioned state gold producer Minerven last month. It said lucrative trading in the precious metal keeps the military loyal to Maduro.

The drop in total reserves could also mean the bank is writing off gold it can no longer access, including some of the $1.2 billion worth stored in the Bank of England. The bank has has denied the government’s requests to repatriate it. Venezuela’s central bank, headed by Calixto Ortega, has been operating with what it calls an emergency team of only about 100 workers of about 2,000 since a power outage left its headquarters without running water. The group has been working from a library with the help of water tanks, focusing on vital tasks such as transactions between local banks and reserves. Bloomberg

-Palladium Supply/Demand Fundamentals Remain ‘Robust.’ Metals Focus remains upbeat on palladium’s prospects despite the recent sharp sell-off from record highs, with the consultancy saying the rally was fueled by genuine tight supply/demand fundamentals and not just speculative frothiness. “Despite the recent fall, we remain positive about palladium prices,” Metals Focus said. “Even the YTD [year-to-date] price fall can be taken as less brutal if reviewed in chronological terms; the April low was only a two-month low and so a pause for breath was perhaps needed before the rally reignites.”

Spot palladium hit an all-time high near $1,615 an ounce on March 21, before losing some $270, or 17%, in a week. The metal ultimately found support in the mid-$1,300s, Metals Focus said. As of 10:25 a.m. EDT, spot metal was up $25 for the day and trading at $1,271.95 an ounce. In addition to profit-taking, prices were dinged by poor car sales data in China and the U.S., which weighed on investor sentiment, Metals Focus said. The metal is used for catalytic converters in motor vehicles. Supply tightness also abated some, as reflected by a fall in leasing rates, which Metals Focus said dropped to low single digits in March.

They had not been this low since October. Meanwhile, analysts pointed out that the net-long, or bullish, positioning of money managers on March 19 amounted to just 1.3 million ounces, down slightly from the end of 2018 and well below the record of record 2.8 million from early 2018. Furthermore, redemptions in palladium exchange-traded products have been “modest,” down by 47,000 ounces, or just 6% from the end of 2018, as of Metals Focus’ report. Read more here-http://bit.ly/2XeVaB4

-Five Charts Show Platinum Markets Coming to Life. After months of being ignored in favor of market darling palladium, platinum is finally getting some attention from investors. The metal, which is mostly used to make jewelry and reduce emissions from car exhausts, is trading near the highest since May and money is pouring into platinum-backed exchanged-traded funds. Prices have gained as expectations for tough wage negotiations this year in top producer South Africa raised the threat of supply disruptions, and platinum’s cheapness relative to other precious metals is also prompting a second look by investors.

“Platinum has been beaten up too much and became too cheap,” said Georgette Boele, a senior foreign-currency and precious-metals analyst at ABN Amro Bank NV. “The fundamentals are not as negative as perceived.” Palladium’s record-setting run early this year catapulted the metal’s premium over platinum to a fresh high in March. The big gap is spurring speculation that carmakers may start working toward substituting platinum in for palladium in their autocatalysts. One of the reasons platinum fell out of favor was the dimming outlook for diesel-fueled vehicles, which mainly use the metal in their autocatalysts. (Palladium is favored in gasoline cars.) However, manufacturers can take steps to use more platinum instead, if there’s enough incentive to make the change. There are also encouraging signs that diesel’s share of the auto market is stabilizing.

Platinum is also historically cheap relative to gold, although the spread has started to narrow in recent weeks. Platinum for immediate delivery traded at about $902 an ounce on Friday, while gold was at about $1,295 an ounce. The gap between the two metals should narrow to $350 in the medium term, said Ole Hansen, head of commodity strategy at Saxo Bank A/S. Bloomberg

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Investing In Fancy Colored Diamonds

Investing in rare colored diamonds is a long-term investment. The economic cycles of the past 15 years have seen colored diamonds reach new heights in value as price records were broken.

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The Investor Learning Center was created to provide investors with the tools to make the right decision when it comes to investing in Rare Colored Diamonds.
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1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1980
  • Total Price: $50,000
  • Price per Carat: $50,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1990
  • Total Price: $150,000
  • Price per Carat: $150,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2000
  • Total Price: $500,000
  • Price per Carat: $500,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2008
  • Total Price: $1,000,000
  • Price per Carat: $1,000,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2009
  • Total Price: $1,090,500
  • Price per Carat: $1,090,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2020
  • Total Price: $2,828,187*
  • Price per Carat: $2,828,187*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2025
  • Total Price: $4,361,506*
  • Price per Carat: $4,361,506*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1980
  • Total Price: $1,000
  • Price per Carat: $1,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1990
  • Total Price: $3,000
  • Price per Carat: $3,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2000
  • Total Price: $9,000
  • Price per Carat: $9,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2008
  • Total Price: $23,500
  • Price per Carat: $23,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2009
  • Total Price: $26,300
  • Price per Carat: $26,300
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2012
  • Total Price: $32,000
  • Price per Carat: $32,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2020
  • Total Price: $53,993*
  • Price per Carat: $53,993*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2025
  • Total Price: $74,873*
  • Price per Carat: $74,873*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1980
  • Total Price: $60,000
  • Price per Carat: $60,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1990
  • Total Price: $200,000
  • Price per Carat: $200,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2000
  • Total Price: $600,000
  • Price per Carat: $600,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2008
  • Total Price: $1,350,000
  • Price per Carat: $1,350,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2009
  • Total Price: $1,494,000
  • Price per Carat: $1,494,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2020
  • Total Price: $4,555,497*
  • Price per Carat: $4,555,497*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2025
  • Total Price: $7,561,708*
  • Price per Carat: $7,561,708*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Red

  • Year: 1950
  • Total Price: $13,800
  • Price per Carat: $13,800
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 1987
  • Total Price: $927,000
  • Price per Carat: $927,000
  • Source: Auction

1 Carat Radiant Cut Fancy Red

  • Year: 2008
  • Total Price: $2,000,000
  • Price per Carat: $2,000,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2009
  • Total Price: $2,074,600
  • Price per Carat: $2,074,600
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2020
  • Total Price: $3,103,720*
  • Price per Carat: $3,103,720*

*Estimated value based on current market trend