The World Financial Report

World Financial Report – May 2nd, 2019

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WORLD FINANCIAL REPORT ON RADIO May 2ND 2019
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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: One of Wall Street’s Last Stock Bears Goes Completely Bullish. The U.S. equity market’s torrid start to the year has converted one of its last doubters. Wells Fargo’s head of equity strategy Christopher Harvey hiked his year-end price target for the S&P 500 Index to 3,088 from 2,665, an upside of nearly 5 percent from where the benchmark gauge closed on Monday. It’s the second-highest call among strategists surveyed by Bloomberg, trailing Deutsche Bank’s Binky Chadha at 3,250 and well above the median estimate of 2,950. Harvey’s previous price target was the second-lowest on Wall Street, more bearish than all but Cantor Fitzgerald’s Peter Cecchini. Bloomberg

-CHART OF THE WEEK: How Bad Timing Screwed Up Returns for a $9 Billion Momentum Bet. The largest exchange-traded fund designed to buy high-flying stocks seems to have lost its edge. The $8.6 billion iShares Edge MSCI USA Momentum ETF, or MTUM, has trailed the S&P 500 Index by almost 4 percentage points since the beginning of January, putting the fund on track for its worst start to the year since it started trading in 2013, data compiled by Bloomberg show. It’s all down to a quirky rule that dictates when the fund tweaks its holdings. MTUM overhauled its portfolio at the end of January, after the MSCI Inc. index it tracks undertook a so-called ad-hoc rebalancing to deal with a spike in volatility. This move stipulated in an appendix of the benchmark’s methodology bolstered defensive holdings, just as their performance peaked, according to Bloomberg Intelligence analysts Athanasios Psarofagis and Peter Chung. Bloomberg

-CHART OF THE WEEK: Forget ‘Sell in May and Go Away.’ SocGen Says It Won’t Work in 2019. With the S&P 500 up 17 percent just four months into the year, investors could be forgiven for thinking about taking profits ahead of the usual summer doldrums. Not so fast, says Societe Generale. “In our view, 2019 will be different,” Societe Generale strategists including Sophie Huynh and Alain Bokobza, the firm’s head of global asset allocation, wrote in a note Tuesday titled “Why ‘Sell in May and go away’ won’t work this year.”

Their argument boils down to earnings downgrades. While it’s true that market performance is typically worse between May and September than at the beginning and end of the year, the pattern generally coincides with profit forecast cuts. Earnings estimates are almost always too lofty at a year’s start, and the downgrades typically cluster in June and October, according to the strategists. But given that profit forecasts were furiously downgraded at the start of 2019, and now estimates are beginning to be revised higher as benchmarks reach records, further cuts in the warmer months are probably unlikely. Bloomberg

-CHART OF THE WEEK: Canada’s Economy Shrinks With Poor Weather Adding to Oil Woes. Canada’s economy returned to its sluggish ways in February, with a drop in output that will reinforce expectations of a slow start to the year. Gross domestic product fell 0.1 percent, taking back some of the 0.3 percent gain in January in part due to poor weather, Statistics Canada said Tuesday from Ottawa. Economists were estimating output would be unchanged. The February data are consistent with an economy that continues to grapple with a number of headwinds and may have barely grown in the first quarter of 2019, extending a slump that began at the end of last year. Bloomberg

-CHART OF THE WEEK: Farmer Income Drops Most Since 2016 as Trade War Losses Mount. Personal income for farmers fell by the most in three years in the first quarter, as losses to U.S. agriculture mount from President Donald Trump’s trade wars. The Commerce Department on Monday cited the steep decline in farm proprietors’ income as a key factor weighing on the nation’s overall personal income growth in March, even though agricultural producers represent only about 2 percent of total employed Americans. The report provided fresh evidence of the growing financial strain on U.S. farmers hit by the trade war, low commodity prices and a series of natural disasters including spring floods in the Midwest. With rural voters a key part of Trump’s electoral coalition, it also underscores the political pressure to conclude the China trade war as U.S. negotiators begin another round of talks in Beijing this week. Bloomberg

-CHART OF THE WEEK: What Oil at $100 a Barrel Would Mean for the World Economy. Surging crude prices are posing another headwind for the world economy after President Donald Trump’s “zero” pledge on Iran oil sales. Brent crude has risen about 33 percent this year and is close to the highest in six months. While higher prices due to strong demand typically reflects a robust world economy, a shock from constrained supply is a negative. Much will depend on how sustained the spike proves to be. Exporting nations will enjoy a boost to corporate and government revenues, while consuming nations will bear the cost at the pump, potentially fanning inflation and hurting demand. Ultimately, there comes a point where higher prices may be damaging to everyone. Bloomberg

-Saudi Energy Minister Khalid Al-Falih added his voice to OPEC members pushing back against President Donald Trump’s call to increase production, saying that Saudi Arabia and its partners remain focused on reducing inventories. His comments come as the IMF published an estimate that said the kingdom needs oil prices close to $85 a barrel to balance its budget. BNNBloomberg

-CHART OF THE WEEK: Millionaires Flee Their Homelands as Tensions Rise and Taxes Bite. The world’s wealthy are increasingly on the move. About 108,000 millionaires migrated across borders last year, a 14 percent increase from the prior year, and more than double the level in 2013, according to Johannesburg-based New World Wealth. Australia, U.S. and Canada are the top destinations, according to the research firm, while China and Russia are the biggest losers. The U.K. saw around 3,000 millionaires depart last year with Brexit and taxation cited as possible reasons. Bloomberg

-Fed holds rates steady, citing lack of inflation pressure. The central bank held its benchmark rate in a target between 2.25% and 2.5%. “On a 12-month basis, overall inflation and inflation for items other than food and energy have declined and are running below 2 percent,” the Fed’s new statement said. The FOMC committee did make a technical adjustment: Interest paid on excess reserves that banks keep at the Fed will now be set at 2.35%, or 0.05 percentage points lower than before. CNBC

-Bank of Canada Governor Stephen Poloz said he still believes policy interest rates would likely need to rise if the slew of factors slowing the expansion vanish. Speaking to lawmakers at a Senate committee hearing, Poloz said accommodative rates are needed to sustain the recovery right now because of headwinds, such as trade tensions, hampering investments. At the same time, a policy rate of 1.75 percent means that in real terms after accounting for inflation of about 2 percent borrowing costs are actually negative, he said. “It is hard to believe that the economy would settle in in a place where it’s growing at potential, and inflation’s on target, and we have unemployment at a 40-year low, and that we’d need a negative real rate of interest in order to sustain that,” Poloz said.

“What we need to see is that those headwinds dissipate, and if those headwinds dissipate, then interest rates would rise.” The comments suggest that Poloz continues to believe higher borrowing costs are more likely than cuts, even after the Bank of Canada formally dropped its hiking bias at a rate decision last week and indicated a prolonged pause. The Bank estimates the neutral rate of interest a level that is neither stimulative or contractionary at a range of between 2.25 percent to 3.25 percent. That estimate of the neutral rate “is our best thinking around where would it naturally go to, because we don’t want people to think that they would just keep rising and rising and rising,” Poloz said. Bloomberg

-President Trump intensifies pressure on the Federal Reserve, calling for a 1 point rate cut and more quantitative easing. The president compares the Fed unfavorably to China’s central bank, and says more stimulus would see the U.S. economy “go up like a rocket.” CNBC

-“Some believe we may have seen the Federal Reserve’s last rate hike in this cycle, and that the next step from here will be a cut in rates,” says Scott Minerd, chief investment officer at Guggenheim Partners. “I believe that view is plainly wrong.” Minerd, whose firm manages $265 billion in assets, said the U.S. economy is doing “just fine” while China’s economic growth is back on track with both fiscal and monetary stimulus in place. Meanwhile, the European Central Bank is working to stimulate economic activity in the region. CNBC

-63% of CNBC survey respondents forecast a 2020 rate hike and some respondents believe a rate hike could and should happen this year. By contrast, the Fed funds futures markets trades with a nearly 80% chance of a rate cut in 2020. Respondents put the probability of a recession in the next 12 months at 21%. CNBC

-First-quarter gross domestic product expanded by 3.2%, the Bureau of Economic Analysis said in its initial read of the economy for that period. Economists polled by Dow Jones expected the U.S. economy increased by 2.5% in the first quarter. Gross domestic product for the first quarter was the best start to a year since 2015. CNBC

-The U.S. government will have to stop borrowing money between July and December if Washington doesn’t agree to raise a legal restriction on public debt, the Treasury Department said on Wednesday. Hitting that so-called “debt ceiling” could trigger a U.S. default on its debt and an immediate recession, a risk that has become a regular facet of U.S. politics over the last decade. The current debt limit was set in March. Treasury has been able to continue borrowing from investors by using accounting measures such as limiting government payments to public sector retirement funds. “Treasury expects that the extraordinary measures will be exhausted sometime in the second half of 2019,” Treasury Deputy Assistant Secretary Brian Smith said in a statement announcing the department’s quarterly debt issuance plans. Reuters

-Icahn Rips MMT, Warns It Could Lead to an ‘Inflationary Spiral.’ Billionaire Carl Icahn says inflation could revive and spin out of control if policy makers were to embrace modern monetary theory. Icahn, a former special adviser to President Donald Trump, is the latest financial heavyweight to denounce the progressive economic doctrine that’s drawn attention from Washington to Wall Street. MMT argues that a country printing its own currency, such as the U.S., can’t go broke and has room to run larger budget deficits so long as prices are subdued. The idea has backing among Democrats like Representative Alexandria Ocasio-Cortez, who’s floated it as a way to pay for a Green New Deal. “You can print money up to a point, but after that point, it could become very dangerous,” Icahn, 83, said in an interview.

“We don’t want to hit a wall that you can’t recover from. Once you get into an inflationary spiral, it’s very difficult to get out of it and therein lies the danger.” Icahn told CNBC three years ago that obsession with the budget deficit was ridiculous, and that America’s status as issuer of the global reserve currency helped alleviate some concerns over the shortfall. His latest comments on MMT echo those of fellow investor Warren Buffett, who said this year he’s not a fan of the doctrine because it could lead to spiraling inflation. Dozens of policy makers and financial leaders have criticized the previously obscure theory in recent months, including Federal Reserve Chairman Jerome Powell and International Monetary Fund chief Christine Lagarde. Bloomberg

-Central banking as we know it is on the way out, and it’s “inevitable” that something like modern monetary theory will replace it, billionaire investor Ray Dalio said. The doctrine, known as MMT, says that governments should manage their economies through spending and taxes instead of relying on independent central banks to do it via interest rates. It also seeks to allay fears over budget deficits and national debts by arguing that countries like the U.S., which have their own currency, can’t go broke and have more room to spend than is usually supposed provided inflation is subdued, as it is now.

Debate over MMT, which languished in obscurity for decades, has exploded in recent months. The idea has been criticized by a series of financial heavyweights, from Warren Buffett to Federal Reserve Chairman Jerome Powell. But Dalio, the founder of Bridgewater Associates, the world’s biggest hedge fund, said policy makers will have little choice but to embrace it. Their challenge will be “to produce economic well-being for most people when monetary policy does not work,” Dalio said in his latest LinkedIn post. Bloomberg

-Canadian oil producers could have collected $20 billion more in revenue last year if they’d been able to sell their product at prices closer to the going world rate, according to a new study from the Fraser Institute. The conservative-leaning think tank said that, based on its calculations, Canadian heavy crude oil traded at an average discount of $26.50 U.S. a barrel last year relative to West Texas Intermediate, the U.S. gold standard. That price discount is far larger than it was in the preceding five years, when producers were seeing a gap of just $11.90 U.S. a barrel.

The price differential is attributed to continuing capacity constraints with existing pipelines and perpetual delays to proposed pipeline projects like the Trans Mountain expansion. The think tank estimated that if pipeline space had been more in line with current production levels, Western Canadian Select, which includes product from the oilsands, would have traded at an average price of $52.90 U.S. last year, instead of the $38.30 U.S. Canadian producers actually collected. Read more here-http://bit.ly/2PFdiRX

-A prominent fund manager is sounding the alarm over Canada’s most expensive real estate market, saying housing prices in Vancouver may be decelerating at a faster-than-expected pace. Ed Devlin, head of Canadian portfolio management at PIMCO) told BNN Bloomberg that he’s taking a closer look at the Vancouver market because the decline in house prices there is gaining “momentum.” “We’ve been talking about, maybe, particularly significant declines at some point.

While I wouldn’t make the call for Toronto, I think Vancouver is much closer to that right now, in terms of prices decelerating at a faster pace,” Devlin said on Tuesday. “The things that are concerning us is that there have been a number of local regulations and taxes put in place that have converted Vancouver from probably being the preferred place for Chinese capital flight into real estate to now being openly hostile.” Devlin questioned who would step in for Chinese investors if they decided to leave Vancouver’s housing market and start selling homes.

“The thing that caught our eye would be Vancouver real estate and whether that turns into something that multiplies out into the greater Vancouver economy, which doesn’t necessarily mean it drags, or there’s a recession, or crash, or anything like that, but it could be as [Bank of Canada] Governor [Stephen] Poloz once said, ‘yet again, another serial disappointment.'” In the Bank of Canada’s Monetary Policy Report released last week, Poloz flagged that the Canadian central bank was monitoring Vancouver and Toronto’s real estate markets as they adjust from “previously frothy markets.” Bloomberg

-The Canadian government should consider being flexible on its new mortgage lending rules because the impact has been longer-lasting and more significant than originally intended, Toronto-Dominion Bank says. Home sales were about 40,000 lower between the final quarter of 2017 and the same period a year later than they otherwise would have been without the rules, according to a note to clients Tuesday by TD economists Rishi Sondhi, Ksenia Bushmeneva and Derek Burleton. That translates into about a 7 per cent decline in sales, they said.

There is also evidence of a shift in business to private lenders who are not subject to the rules, known as B-20 and implemented by Canada’s banking regulator. The economists estimate the share of borrowers in Toronto accessing funds from alternative lenders increased to 8.7 per cent in the second quarter 2018, from 5.9 per cent in the same quarter a year earlier. The changes mean federally regulated lenders must now run a 200 basis-point stress test on new mortgages, to ensure the quality of lending remains high amid escalating home prices. The measures are disproportionately affecting first-time homebuyers, who normally account for between 40 per cent and 50 per cent of the market, as well as cities that have more youthful demographics like Toronto and Vancouver, TD said. Read more here-http://bit.ly/2VEsGDz

-The median price of a San Francisco Bay Area home sold last month fell slightly compared with the prior-year period, marking the first annual drop since the bottom of the last housing crash, seven years ago, according to CoreLogic. In March, the median price was $830,000, down 0.1% compared with March 2018. The decline came as price gains had been shrinking for several months. Before last month, the median sale price had risen annually for 83 consecutive months since April 2012. CNBC

-A record 8.46 million Japanese homes are sitting vacant as builders keep adding stock in a country where the population is shrinking. The number jumped by 260,000 in a twice-a-decade survey released by the government on Friday, reaching 13.6 percent of housing, the Nikkei Asian Review reported. Many of the properties are for future sale or rental or vacation. However, some are abandoned, posing hazards, the news service reported. Vacancy rates were highest in a prefecture that’s home to the northern part of Mount Fuji, which is a popular area for holiday homes.

However more people moving from rural areas to metropolitan ones is also driving the increase, according to the news report. Stashes of cash are also often discovered when these houses are taken down, the Nikkei Asian Review said. The equivalent of more than $200,000 was found at one Tokyo demolition site in 2018. Still, the number of empty homes may be dwarfed elsewhere. A 2017 survey indicated a vacancy rate of about one-in-five urban dwellings in China. That translates to around 65 million homes, according to media reports. Bloomberg

-U.S. consumer confidence rebounded in April as Americans felt more optimistic about present and future economic conditions, underscoring how a tight labor market and higher wages are underpinning attitudes amid some uncertainty. The Conference Board’s index climbed to 129.2, according to data from the New York-based group Tuesday that topped economist estimates in a Bloomberg survey. The gauge of views on the present situation increased to 168.3, while the expectations index climbed to 103. Bloomberg

-U.S. consumer spending increased by the most in more than 9-1/2 years in March as households stepped up purchases of motor vehicles, but price pressures remained muted, with a key inflation measure posting its smallest annual gain in 14 months. Reuters

Private payrolls grew by 275,000 last month, the biggest increase since July, when they expanded by 284,000. Services-providing jobs increased by 223,000 in April, led by a gain of 59,000 jobs in professional and business services. “The job market is holding firm, as businesses work hard to fill open positions,” says Mark Zandi, chief economist at Moody’s Analytics. CNBC

-A metals manufacturer faked test results and provided faulty materials to NASA, causing more than $700 million in losses and two failed satellite launch missions, according to an investigation by the U.S. space agency. The fraud involved an Oregon company called Sapa Profiles Inc., which falsified thousands of certifications for aluminum parts over 19 years for hundreds of customers, including NASA. The bad parts were used in the making of Taurus XL, a rocket that was supposed to deliver satellites studying the Earth’s climate during missions carried out in 2009 and 2011.

The launch vehicle’s fairing, a clamshell structure that carries the satellite as it travels through the atmosphere, didn’t fully open, causing the unsuccessful launch, according to a statement from NASA. “When testing results are altered and certifications are provided falsely, missions fail,” said Jim Norman, director for launch services at NASA in Washington. He added that years of scientific work were lost because of the fraud. Bloomberg

-Only one bottle of this $85,000 whisky exists on Earth. Rare whiskys can fetch more than $1 million at auction. But for this whisky, only one bottle exists on Earth. High-end scotch whisky maker The Dalmore and Massimo Bottura, the executive chef of Modena, Italy’s three-Michelin starred Osteria Francescana (ranked No. 1 restaurant in the world by The World’s 50 Best Restaurants) partnered to produce The Dalmore L’Anima Aged 49 Years. The single malt whisky is being auctioned at Sotheby’s with bids being accepted through May 9. The whisky is expected to sell for at least $85,000 based on previous The Dalmore auctions, according to the company. Read more here-https://cnb.cx/2IR8Lvd

-Tech giant Microsoft reported better-than-expected quarterly earnings after the bell Wednesday, and on Thursday the shares jumped by 5%, catapulting the company to $1 trillion in market value. Its current share price is hovering around $129. If you had invested in Microsoft 10 years ago, that decision would have paid off. According to CNBC calculations, a $1,000 investment made on April 25, 2009, would be worth nearly $8,000 as of midday April 25, 2019, for a total return of almost 700%. Over the same period, the S&P 500 returned just over 300%. CNBC

Apple continues to be among the most cash rich companies in the world even with aggressive plans to expand in the U.S. The company promised to contribute $350 billion to the U.S. over five years, including some that will come through taxes on repatriated cash. Last year, the iPhone maker spent $74.2 billion buying back its own shares up from a total $34.4 billion in 2017. CNBC

-A Canadian $10 bill featuring Nova Scotia civil rights pioneer Viola Desmond has been named the best in the world. The International Bank Note Society has announced the Desmond bill won the coveted Bank Note of the Year Award for 2018, beating out top designs from places like Switzerland, Norway, Russia and the Solomon Islands. In March 2018, the federal government unveiled the vertical banknote design featuring Desmond’s portrait and a map of her north-end Halifax neighbourhood. The bill went into circulation in November.

Desmond played a seminal role in Canada’s civil rights movement when, on Nov. 8, 1946, she went to see a movie at the Roseland Theatre in New Glasgow, N.S., while her car was getting fixed. Desmond, 32, was dragged out of the theatre by police and jailed for defiantly sitting in the “whites only” section of the film house. At the time, black people could only sit in the balcony. Her ensuing legal fight against that injustice helped end segregation in Nova Scotia. In 2010, she was posthumously awarded an apology and a free pardon. Read more here-http://bit.ly/2ISZliP

Vladimir Guerrero Jr. was perhaps thestory of this past weekend in the Major Leagues, and now we have another way of measuring fans’ immense interest in his debut. The Topps trading card company announced Monday that Guerrero’s first rookie card, made available the day after his debut Friday in Toronto, has broken a record for any card released through the company’s TOPPS NOW program by selling 19,396 copies within the one day of sales. That mark broke the previous one-day record of 17,323, set by Angels two-way phenom Shohei Ohtani last year. Read more here-https://atmlb.com/2J7G7oT

-Clemson has been committed to keeping head football coach Dabo Swinney among the highest paid head coaches in the country. The Tigers took another step toward doing that on Friday. Clemson’s Board of Trustees approved a new contract for Swinney Friday morning, a 10-year deal that will pay him an average annual salary of $9.3 million. The 49-year-old Swinney is now the second-highest paid coach in the country in terms of annual salary. Alabama’s Nick Saban is first at $9.44 million. Saban’s contract is a seven-year deal. Read more here-http://bit.ly/2IPrVBH

-“Avengers: Endgame” broke all kinds of box-office records over the weekend, powered by mostly male fans who did something uncharacteristic of the streaming era: lining up to see a premiere. The movie took in $1.22 billion globally in its debut, collecting $357.1 million in the U.S. and Canada alone, and blowing through the $258 million mark held by the superhero team’s own gloved hands with last year’s “Infinity War.” Walt Disney Co. now boasts the top four spots for domestic opening weekends, rounded out by “The Last Jedi” and “The Force Awakens” from the Star Wars franchise, according to researcher Comscore Inc. Bloomberg

-A shooting at a California synagogue killed one and injured three people on Saturday. Authorities announced Saturday that a 19-year-old male suspect was arrested in connection with the shooting at the Chabad of Poway synagogue, which the city’s mayor saidwas a “hate crime,” due to statements the shooter made at the scene. Lori Kaye-Gilbert, 60, died after stepping into the line of fire to protect the synagogue’s rabbi, who was delivering a sermon. Authorities said two other people, including an eight-year-old girl, were being treated at local hospitals for their injuries. John Earnest, 19, was identified by authorities late Saturday as the suspect in the attack. Read more here-http://bit.ly/2GL56f5

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Second-Biggest Diamond in History Found, But It’s Not That Great. A giant 1,758-carat diamond, the second-biggest ever discovered, has been found in Botswana. But unlike its rivals, it won’t fetch a record-breaking price. Lucara Diamond Corp. said it unearthed the stone roughly the size of a tennis ball at its Karowe project in Botswana, a mine renowned for its huge gems including the previous holder of the No. 2 position. Still, the company said the diamond is a near gem of variable quality, meaning it won’t yield incredibly valuable polished diamonds on par with earlier finds.

Lucara’s Karowe mine is becoming famous for giant stones. In 2015, Lucara found the 1,109-carat Lesedi La Rona, which at the time was the second-largest ever and eventually sold for $53 million. The mine has also yielded a 813-carat stone that fetched a record $63 million. Those two gems were both much more valuable Type-IIa stones. Still, the latest find shows that Karowe’s plant can process and detect huge gems without breaking them, a consistent headache when trying to separate brittle stones from hundreds of tons of waste rock.

“Karowe has now produced two diamonds greater than 1,000 carats in just four years, affirming the coarse nature of the resource and the likelihood of recovering additional, large, high quality diamonds in the future,” Eira Thomas, Lucara’s chief executive officer, said in a statement. Lucara, based in Vancouver, Canada, rose as much as 12 percent, the most in a year. The biggest diamond ever discovered is the 3,106-carat Cullinan, found near Pretoria in South Africa in 1905. It was cut into several polished gems, the two largest of which — the Great Star of Africa and the Lesser Star of Africa are set in the Crown Jewels of Britain. Bloomberg

-Argyle Yields Its Largest-Ever White Diamond. Rio Tinto’s Argyle mine has yielded the largest gem-quality white diamond in its 35-year history, the miner said Tuesday. The 28.84-carat stone, named Argyle Octavia for its octahedral shape, was discovered at the Australia-located mine last month. “This discovery is a testament to the extraordinary Argyle orebody that continues to deliver these miracles of nature, even as it nears the end of mine life,” said Arnaud Soirat, CEO of Rio Tinto’s copper and diamond division. The Argyle mine is set to close in 2020. The company will sell the diamond at a tender in Antwerp later this year. Read more here-http://bit.ly/2JeiLxM

-Cullinan Yields 210ct. Rough. Petra Diamonds has unearthed a white diamond weighing 209.9 carats at its Cullinan mine in South Africa. The D-color, type II, gem-quality stone is the fourth over 100 carats the miner has recovered this year, and the third since the beginning of March, it said last week. Those included a 425.10-carat stone, which it named The Legacy, and a 100.83-carat diamond. Petra will sell its latest discovery during its fourth fiscal quarter, ending June 30, along with The Legacy. Read more here-http://bit.ly/2LhNInH

-Christie’s to Sell Historic Golconda Diamond. Christie’s New York auction will feature a 17.21-carat diamond given to Queen Charlotte of Great Britain by a regional ruler in India. The pear-shaped, brilliant-cut diamond, called Arcot II, was found in India’s Golconda region in the late 18th century. The stone, presented to the queen by the Nawab of Arcot, will go under the hammer at the Maharajas & Mughal Magnificence sale on June 19, the auction house said last week. The stone is one of a number of Indian jewels from the Mughal period featured at the sale. The lots on offer span a period of more than 500 years.

“This landmark collection traces the history of Mughal jewels and objects to [the] present day, and represents the most significant collection of its type ever to come to auction,” said François Curiel, chairman of Christie’s Europe. “The collection begins in Mughal India, the most important dynasty that ruled the country, famous for its emeralds, diamonds, sapphires, rubies, jeweled weapons and objects that are bejeweled beyond belief.” Christie’s will also offer the Mirror of Paradise, a 52.58-carat, D-color, internally flawless Golconda diamond, as well as carved Mughal emeralds ranging from approximately 10 carats to over 200 carats.

Other notable lots include the Imperial Spinel Necklace and sarpechs traditional Indian turban ornaments. A diamond necklace originally from the collection of the Nizam of Hyderabad, featuring almost 200 carats of Golconda diamonds, will also be for sale. The Mughal jewels are from the collection of the Al-Thani dynasty, the ruling family of Qatar. The auction house will preview the items between April 24 and June 18 in London, Shanghai, Geneva, Hong Kong and New York. Read more here-http://bit.ly/2XZyW6h

-Botswana Unveils 20ct. Okavango Blue Diamond. Okavango Diamond Company (ODC) has revealed a 20-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 20.46-carat 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/2DIiY9b

-Sotheby’s Garners $21.5M at New York Auctions. Two Sotheby’s New York auctions brought in a combined $21.5 million Wednesday, with a blue-diamond ring achieving the top price. The cut-cornered square modified brilliant-cut, 3.24-carat, fancy-intense-blue, VVS1-clarity diamond ring, flanked by two pear-shaped diamonds, fetched $2.3 million, or $709,877 per carat. It had been estimated at $2.5 million to $3 million for the Magnificent Jewels sale. Other notable items at the sale included a pair of round, F-color, VS2-clarity diamond earclips by Betteridge.

The jewels, each weighing 20.27 carats, sold for $1.7 million, at the high end of their presale estimate of $1.3 million to $1.8 million. A round, 30.40-carat, H-color, VS2-clarity diamond ring by the same jeweler garnered $1.2 million, beating its high estimate of $1.1 million. Additionally, a Serpenti necklace by Bulgari, comprising 260 carats of diamonds, went for $920,000, within its presale valuation of $800,000 to $1 million. The piece is transformable: It can also be worn as a belt. In total, the Magnificent Jewels auction earned $17.7 million. The subsequent Fine Jewels sale yielded $3.9 million, with 82% of lots sold. Signed pieces by Cartier, Van Cleef & Arpels, and Tiffany & Co. proved popular with buyers. Read more here-http://bit.ly/2VbupRx

-Twin-Stone Ring Fetches $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. Christie’s sold 86% of the lots offered at the auction. Read more here-http://bit.ly/2PI3ExP

-34ct. Yellow Diamond Sells for $520K. A yellow diamond ring that once belonged to the royal family of Hawaii sold for $519,500 at auction Sunday. The old-mine-cut, 34.28-carat, fancy-light-yellow, VS2-clarity diamond ring, set in platinum and white gold, was the lead item at the Clars Auction Gallery sale in Oakland, California. It realized $15,155 per carat, according to Rapaport calculations. The piece with a high presale estimate of $600,000 was originally bought by Hawaiian King Kalakaua for his wife, Queen Kapiolani, to wear to Queen Victoria’s Jubilee celebrations in England in 1887.

In late 1890, the king traveled to San Francisco, where he used the ring as collateral for a gambling loan from Crocker Bank. Kalakaua died during the trip, having never returned for the ring. Crocker Bank sold it to a Texas gem dealer at the turn of the century. In 1950, Frank Spenger, owner of the famous Spenger’s Fresh Fish Grotto in California, purchased the ring, which he displayed in a special case at the restaurant’s Diamond Bar until October 2018, when it closed after 128 years in business. The yellow diamond was sold as part of the Spenger Collection auction, along with other items, including fine art, furniture and historical items. Read more here-http://bit.ly/2GW9SYo

-17ct. Sapphire Smashes Estimate at Bonhams. It’s not often that a jewel sells for almost double its pre-auction estimate, but that happened this week with a rare Kashmir sapphire at Bonhams. The 17.43-carat stone fetched GBP 723,062 ($944,713), or close to $54,000 per carat, beating its high valuation of GBP 400,000 ($521,440). The cushion-shaped, vivid-blue stone dates to the late 19th or early 20th century, and was formerly owned by a European noble family. It headlined Bonhams’ London sale on Tuesday in its first appearance at auction.

“We have a strong track record of selling Kashmir sapphires at Bonhams, with our international clients eager to add an important gem to their growing collections,” said Emily Barber, director of jewelry at Bonhams UK. The piece wasn’t the only one that exceeded expectations: A transformable diamond and sapphire necklace by designer Grassy, which can be changed around and worn in five ways, garnered GBP 287,562 ($375,713). The ensemble, which features a 34.59-carat detachable sapphire, beat its estimate of GBP 120,000 to GBP 180,000 ($156,800 to $235,200). “To discover a necklace like this today, intact and never before seen on the open market, offered with its original design drawings, is not only rare, but illustrates the compelling stories that period jewels can tell,” Barber added.

Other notable items at the sale included a step-cut, 9.07-carat, F-color, type IIa diamond ring with the potential for VVS1 clarity. Originally estimated at GBP 250,000 to GBP 350,000 ($325,900 to $456,260), the piece sold for GBP 250,062 ($326,717). Additionally, a ring featuring a step-cut, 22.02-carat, Colombian emerald sitting on a mount formed by two marquise and brilliant-cut diamond honeybees and two brilliant-cut diamond leaves brought in GBP 100,062 ($130,736). Its presale estimate ranged from GBP 65,000 to GBP 85,000 ($84,730 to $110,810). The jewel, which is signed by both Tiffany & Co. and designer Jean Schlumberger, was part of the collection of artist Andy Warhol. Read more here-http://bit.ly/2GUo43W

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GOLD-SILVER-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

-Gold Gets Taken for a Ride After Fed Comments. Gold traders can be forgiven for feeling a bit queasy as efforts to parse economic signals from the U.S. Federal Reserve put them on a roller-coaster ride.

The metal jumped on Wednesday after the Fed said in a statement that it kept its benchmark U.S. rate unchanged and lowered the interest paid on reserves deposited with the central bank. Low rates are a boon to gold, which doesn’t pay interest. Those gains evaporated minutes later, when Fed Chairman Jerome Powell said low inflation may be transitory, and that risks to the outlook appear to have “moderated somewhat,” bolstering the dollar and sapping demand for the metal as a haven. Spot bullion erased gains, falling as much as 0.8 percent.

“What a tease,” Tai Wong, head of base and precious metals derivatives trading at BMO Capital Markets, said by email. “Powell’s comment that a drop in core inflation was ‘unexpected’ and ‘transitory,’ and risks abroad moderated, sends gold $7 lower, erasing the $4 gain.” Gold for immediate delivery slipped 0.5 percent to settle at $1,276.76 an ounce on Wednesday. Prices have fallen for three straight months as a strong dollar, rising global equities and optimism over U.S.-China trade talks reduced the appeal of the metal as a haven. Bloomberg

-Russia’s thirst for gold is down to diversification, central bank governor says. Russia’s gold buying surge over the past year is simply down to a wish to diversify its portfolio of reserves, the central bank governor told CNBC Friday.

The country overtook China last year to become the world’s fifth largest official sector holder of gold. The central bank bought 8.8 million troy ounces of bullion last year, beating a record 7.2 million ounces set in 2017, and fresh data continues to show that the buying hasn’t stopped. Experts have speculated that Western sanctions could have caused the move, with the safe-haven asset being exempt from any possibility of blacklisting.

Others suggest Russia wants to reduce its reliance on the U.S. dollar, or is shying away from the euro or the pound, which have seen their values fall due to policy easing and Brexit, respectively. But Elvira Nabiullina, the governor of Russia’s central bank, told CNBC’s Geoff Cutmore in Moscow Friday that “diversification” was the key reason behind the purchases, and not a lack of trust for any specific currency. “You see we try to diversify our international reserves composition. Because we estimate all the possible risks, economic and geopolitical risks,” she said. “We try to understand the long-term dynamics of different types of currencies and the needs of our economy for using this currency and the process of taking this decision about the structure of these reserves,” she added.

Seen as a traditional hedge against inflation, gold was trading at $1,284 per troy ounce on Friday. It’s still down considerably against a peak in the early half of the decade when it rose above $1,900. Quantitative easing by central banks which essentially floods economies with cheap cash stoked fears that inflation would rise, causing a price rally in the commodity. But by 2013 that rally had fizzled out with the worst of the economic downturn over and the Federal Reserve indicating that it would soon dial back on stimulus. Read more here-https://cnb.cx/2LfpnPo

-Texas building gold depository with $100B capacity and security that rivals Fort Knox. Texas lawmakers created a new storage option for miners when they signed off on building America’s first state-backed gold depository in 2015. The Texas Bullion Depository, currently under construction and with the capacity to house physical gold valued in excess of $100 billion will be the most secure facility outside of Fort Knox, will have the full protection of the state of Texas, and is insured by Lloyds of London.

Texas will have a lot of gold to protect Governor Greg Abbott said when the project was announced last year that it would allow Texas to “repatriate” its gold from New York. The University of Texas/Texas A&M Investment Management Company holds $1 billion worth of gold bullion at the HSBC Bank in New York City, the Texas Tribune reported. “This goes back to the precious metals storage industry here in the US. Most of the depositories are in the east coast. I say why don’t we have more depositories in Texas?

So, the legislature ultimately decided this was something that they wanted to do,” Texas Comptroller Glenn Hegar told MINING.com. “This is an opportunity for people to store precious metals in a variety of different options, another tool for those in the mining industry. This would also provide that additional oversight, that additional security, accountability, whether it is a short term or long-term storage,” Hegar said. Hegar’s office selected Lone Star Tangible Assets, a firm that specializes in moving and storing precious metals, to construct and operate the depository with state oversight. Read more here-http://bit.ly/2vwpQ55

-If Silver Could Talk: What She Told Me When I Wrote to Her. Jeff Clark, Senior Analyst, GoldSilver. I wrote to silver last week, and she answered back. I’d like to share our correspondence with you. Read more here-http://bit.ly/2LqF1Ym

Dear Silver,

I’m a big fan. You offer so many important benefits to an investor, and at such a low price. You’re a permanent store of value. You’re nobody else’s liability, so I know when I buy you, I’m not relying on anyone else to live up to their end of the bargain in a crisis. You are available in sizes that make you affordable for everyone and have been used as money for thousands of years.

You’re the history and you’re the future. Which is why it’s amazing to me you’re so unappreciated in the present.

I’m incredibly excited that I get the opportunity to acquire all your powerful attributes at a 70% discount from your record high, set this day 8 years ago, especially when all the reasons I bought you at $40 are even more relevant today than back then. I fully understand the explosive potential you hold, but I have to admit, the wait can sometimes be frustrating.

Is your price weakness almost over, or is it here to stay?

Jeff Clark, devoted silver investor

-Greg Hunter: Gregory Mannarino Interview, Debt Boom Supporting Global Markets, Buy Gold & Silver Now. Mannarino goes on to say, “This is where we need to be if we understand there is an inverse bubble in gold and silver. We need to be on the right side of the trade. Bet against the debt, and become your own central bank. This is what people need to do: buy hard assets, like gold and like silver. A house is a hard asset, but it is massively overvalued. The real estate market is in a bubble worse than 2008. That’s going to correct too. Interest rate suppression has forced cash into assets it shouldn’t have gone into.

I think we started this entire conversation off with the distortions that exist today have eclipsed every single distortion that has ever existed in financial markets in history. This is very unique. Physical gold, and more specifically physical silver, are the greatest trades on earth. They are the most undervalued and suppressed assets on earth. They are real wealth, and they have represented real wealth for thousands of years. No politician and no Federal Reserve Chairperson is going to tell me different. No amount of rigging will be able to stop the explosive move that gold and silver will make at some point.” Read more here-http://bit.ly/2JgNHxN

-Palladium Sees Wildest Price Swings Since 2015. Palladium futures tumbled, spurring the wildest price swings since late 2015 as investors turned sour on the precious metal. The commodity used mostly in auto catalysts has been a profitable trade as supply shortages boosted prices of near-term contracts. That gave investors the incentive to sell futures closer to delivery and buy those that are further along the curve as producers struggle to meet demand from carmakers. That incentive has narrowed this year as supply concerns ease.

Palladium futures for delivery in June settled in New York on Monday at a premium of more than $3 to the September futures. The spread between the two contracts has shrank from more than $20 in February. The cost to borrow the metal has also tumbled this year. “People who have done very well long material and lending it have seen margins compress,” Tai Wong, the head of base and precious metals derivatives trading at BMO Capital Markets in New York, said in an email. “The drastic supply shortage seen early in the year has eased significantly.” The decline in the lease rate for palladium means there’s less incentive for industrial consumers to buy the metal outright, said Michael Sheehan, a senior portfolio manager at Orion Commodities Fund. 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.
Access our archives of exciting documentary video, informational content, historical pricing, and much more.
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The GIA report for this diamond is not posted on the website at this time however it is available. Please fill out a form to inquire or call us directly at 800-456-3934 for more information.

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