GOLD MARKET

By Ben Rooney

NEW YORK (CNNMoney.com) -- Gold prices plunged Thursday as the dollar surged against the euro amid concerns about the economic health of certain European nations.

February gold fell $28, or 2.5%, to settle at $1,107.40 an ounce after falling to a low of $1,098 an ounce earlier in the session. The retreat came two weeks after gold settled at an all-time high of $1,218.30 an ounce.

Carlos Sanchez, a precious metals analyst at CPM Group in New York, said the selloff was "definitely attributable to the stronger dollar, and some stop-loss selling."

Dollers jumb to 1.3% against the euro to $1.4346, its highest level since early September. The euro came under pressure after Standard & Poors downgraded Greece's credit rating, raising concerns about the health of other strained euro zone economies like Ireland.

A stronger dollar tends to weigh on the price of gold, since the precious metal is traded in U.S. dollars around the world.

A stronger dollar tends to weigh on the price of gold, since the precious metal is traded in U.S. dollars around the world.

The buck was also supported by a Wednesday statement from the Federal Reserve that said U.S. economic conditions continue to improve, even as the central bank held interest rates near historic lows.

Sanchez said a firm move below $1,100 an ounce could pave the way for a brief retreat toward a range near $1,050 an ounce. However, he expects the weakness to be short lived.

While the dollar has regained ground in recent days, many traders expect gold prices to push higher into next year amid strong investor interest and the outlook for low U.S. interest rates

GOLD

By Syed M. Aslam

From time immemorial, gold has been respected as the best used precious metal not only due to its usage in ornaments but also as a widespread means of investment 'a saving for a rainy day'. No wedding ceremony in Pakistan is complete without gold jewellery which traditionally has become the most expensive item on the dowry list for parents of brides and also for the prospective grooms.

In Pakistan, like many other countries in the region, gold jewellery is more than a thing of beauty, a joy for everyone, particularly the women folks. It is the most credible mean of investment, which offers better returns than fixed deposits. The popular opinion is not unjustified as there has been a tremendous increase in the price of gold over the years.

Pakistan produces one the finest gold jewellery, particularly plain and generally studded, and its hand made designs are second to none in the world. It is also gifted with vast deposits of world class precious and semi-precious stones including rubies from Hunza Valley, pink emerald of Swat, and peridotes from Kohistan.

The gold trade in Pakistan is entirely dependent on imported gold the primary source of which is Dubai. The previous government granted licence to a single importer, 'ARY', for import of gold into the country. The present government has granted licences to two more importers making three companies responsible for all the gold imports into the country. The import of gold is subjected to duty of $ 1 per tola (11.54 grams), which translates into about Rs 4 per gram at current exchange rates.

Attempts to revive Saindak mine in District Chagai in the province of Balochistan, the first large scale metal mining project in Pakistan, has remained fruitless due to heavy capital investment. Repeated attempts to revive the Saindak Copper Gold Project to produce 15,810 tonnes of blister copper annually with gold containment of 1.47 tonnes, were futile due to an extremely uneconomical gold recovery cost. According to Mahmood Choksy, a gold jewellery exporter and also chairman of All Pakistan Gem Merchants and Jewellers Association, the cost to recover gold at Saindak is a staggering $ 400 per ounce, way above the international price of $ 284 per ounce.

According to World Gold Council (WGC), the marketing arm of world gold miners, gold demand in the country increased from 81.8 tonnes in 1997 98.2 tonnes in 1998 depicting a 20 per cent increase. India, the largest consumer of gold in the world, set a new record for the fourth consecutive year in 1997 as total gold demand increased by 11 per cent from 736 tonnes in 1997 to 815 tonnes in 1998.

WGC which started monitoring the gold demand in Pakistan for the first time in 1998, attributed the increased gold demand in Pakistan on the high affinity for gold in rural Pakistan, combined with slump in international prices in the same year, particularly in the third quarter when it touched as low as $ 288 per ounce.

In spite of economic sanctions, imposed on Pakistan after its option to go nuclear, the gold demand in the country remained unaffected in the country, primarily due to traditional belief that this is feasible to investment in gold.

Pakistan is entirely dependent on imported gold for jewellery manufacture and all other purposes. According to Mahmood Choksy, the bulk of gold import— about 40 per cent— is used in jewellery manufacturing while a similar quantity is being smuggled out of the country, mainly to India. The remaining 20 per cent, he added, is held for investment purposes in the form of biscuits. Industrial usage such as liquid gold in the manufacture of crockery and circuit board is negligible. However, jewellers have their own statistics about various statistics in the gold trade including its usage, ratio of new gold as compared to old, and local sales.

Muhammad Saleem, a local jeweller, said that 70 per cent of all gold imported is used by the jewellers, 5 per cent is used by the industry while the rest of the 25 per cent finds its way out of the country illegally.

Similarly, sources in the gold trade do not agree with the ratio between the use of new and old gold. Choksy says it is 40:60, the General Secretary of Hydri Sarrafa and Jewellery Group, Abdul Wahab put the ratio at 65:35 (65 per cent new, 35 per cent old) while another jeweller put the ratio at 70-80 per cent.

Saleem said that the ratio of usage of old and new gold by jewellers depends on the area where an individual shop is located— shops centred around posh areas such as Zaib-un-Nisa Street use comparatively lesser quantity of old Gold as compared to those located in lesser expensive markets. He put the ratio in the Saddar area at 40:60 (40 per cent old, 60 per cent new).

They also disagree with the trends of sales of gold jewellery during the last many years. Choksy said that sales of gold, particularly jewellery, has increased over the years due to an increase in population. His views were shared by Saleem who agreed that sales are ‘OK’ in spite of a substantial increase in the price of gold. Abdul Wahab, however, said that substantial increase in the cost of living and the subsequent decline in purchasing power have affected the sales. However, the ratio of visits by the buyers to the jewellers' shops has not declined but buyers prefer purchasing lighter jewellery.

PAGE faxed a questionnaire to Yousuf Akhtar Hussain, WGC’s manager for Pakistan and Egypt, and received a reply from Dubai. Following is the excerpts of the answers which will help the readers to understand the gold market and trade in Pakistan.

According to Yousuf, his experience indicates that during the last five years, gold consumers' trend has witnessed slow shifting towards lighter jewellery with the exception of areas in the interior, may be. However, he added that there seems a slight preference towards a bit more modern designs and, in general, buyers in Pakistan look for Far Eastern designs usually adapting it to their personal tastes. There is certainly a demand for Indian designs, as per research, conducted by the Council in 1997.

According to Yousuf, plain jewellery is more preferred by Pakistanis and it surpasses the studded jewellery by 65:35 and female buyers out number males by 83 per cent to 17 per cent. In addition, rings and earrings form the bulk of jewellery purchase in Pakistan, both in terms of units and tonnage. Average weight of gold jewellery purchase in the country is ten grams though it is higher in rural areas. While, the jewellery buying in Pakistan is mostly pre-planned, as far as marriages are concerned, with very little impulsive purchase, the good thing is that it is considered as the first option by over 60 per cent of the target audience. For instance, 60 per cent of urban and 63 per cent of rural people prefer to buy solid gold jewellery as compared to 10 per cent and 11 per cent respectively for designer clothes.

While 22 karat gold is used widely in Pakistan, an increase towards 24 karat is visible. In spite of hoardin

DIAMONDS

By Imran Ali

Pearl is a beautiful and precious stone which comes in lovely colors and different shapes. White pices of this gemstone are famous worldwide and some people think that these items exists in only white color. This misconception is because white color of these pieces is the most used color and so is quite popular among people. However, these pieces comes in exquisite colors; black, white, rose pink, silver and golden and different types including cultured, Tahitian, South Sea, Freshwater and Akoya types. Tahitian pieces are also known as ‘black pearls’. This lovely and luminous gemstone when set in different jewellery articles looks truly fascinating. This jewellery is the choice of many women. Girls prefer jewels of this jewelry for their wedding day, anniversaries, engagements and other formal occasions.

This is also a birthstone of the month of June. It symbolizes nobility and being a birthstone they have the power to bring wealth and longevity to its wearer. Thse are also known as ‘nature’s perfect gems’. This word is derived from a Latin word ‘perula’ which means small pearl. There are different mysteries about this gorgeous gemstone; they are sometimes labeled as tears of mermaid and angles. Persians believed that these are formed when a rainbow meets the earth and are also said to be the outcome of the tears of Adam and Eve and are born out of a lake. This gemstone is also used for medical treatment in some areas like ancient Chinese used to swallow this gemstone to cure fever and eye diseases.

To buy real and genuine pieces you should carefully examine them before buying. To avoid buying fake pieces you can check the authenticity of these stones by rubbing two pieces. If they are smooth then they are not real because real pieces are a little grainy and course. Always examine the pieces under proper and natural light to check their size, color, orient and shape. Like any other stone, these need proper care. Never store these gemstones with other hard stones and jewellery. This jewellery is very versatile and can be worn any time; it is ideal for evening wear, for party wear, it can also be worn at work.

These gemstones with an unsurpassed beauty and loveliness come in different shapes. Round shape is the most popular shape and other shapes like hemispherical and oval shapes are also admirable. Cultured pieces are mostly used in pearl articles like trendy and modern designs of rings, pendants, earrings, bracelets and necklaces. Round shaped pieces are the most valuable types of this gemstone.

The fashion of pearl jewellery never becomes outdated so when buying articles don’t compromise on the quality of pieces for a little money. Imitation of these gemstones is also available and is known as ‘faux’. As these gemstones can be very expensive, people go for its imitation. Imitation consists of glass, plastic, or shell beads which are given the look of these gemstones. The imitation ppieces may be as shiny as real ones but that is only a surface glow, however, in real pieces there is an inner glow. The difference between the real and imitation pieces is quite apparent and one cannot get deceived by the fake pieces, easily.

Hope Diamond

The history of the stone which was eventually named the Hope diamond began when the French merchant traveller, Jean Baptiste Tavernier, purchased a 112 3/16-carat diamond. This diamond, which was most likely from the Kollur mine in Golconda, India, was somewhat triangular in shape and crudely cut. Its color was described by Tavernier as a "beautiful violet."

Tavernier sold the diamond to King Louis XIV of France in 1668 with 14 other large diamonds and several smaller ones. In 1673 the stone was recut by Sieur Pitau, the court jeweler, resulting in a 67 1/8-carat stone. In the royal inventories, its color was described as an intense steely-blue and the stone became known as the "Blue Diamond of the Crown," or the "French Blue." It was set in gold and suspended on a neck ribbon which the king wore on ceremonial occasions.

King Louis XV, in 1749, had the stone reset by court jeweler Andre Jacquemin, in a piece of ceremonial jewelry for the Order of the Golden Fleece (Toison D'Or). In 1791, after an attempt by Louis XVI and Marie Antoinette to flee France, the jewels of the French Royal Treasury were turned over to the government. During a week-long looting of the crown jewels in September of 1792, the French Blue diamond was stolen.

In 1812 a deep blue diamond described by John Francillion as weighing 177 grains (4 grains = 1 carat) was documented as being in the possession of London diamond merchant, Daniel Eliason. Strong evidence indicates that the stone was the recut French Blue and the same stone known today as the HopeDiamond. Several references suggest that it was acquired by King George IV of England. At his death, in 1830, the king's debts were so enormous that the blue diamond was likely sold through private channels.

The first reference to the diamond's next owner is found in the 1839 entry of the gem collection catalog of the well-known Henry Philip Hope, the man from whom the diamond takes its name. Unfortunately, the catalog does not reveal where or from whom Hope acquired the diamond or how much he paid for it.

Following the death of Henry Philip Hope in 1839, and after much litigation, the diamond passed to his nephew Henry Thomas Hope and ultimately to the nephew's grandson Lord Francis Hope. In 1901 Lord Francis Hope obtained permission from the Court of Chancery and his sisters to sell the stone to help pay off his debts. It was sold to a London dealer who quickly sold it to Joseph Frankels and Sons of New York City, who retained the stone in New York until they, in turn, needed cash. The diamond was next sold to Selim Habib who put it up for auction in Paris in 1909. It did not sell at the auction but was sold soon after to C.H. Rosenau and then resold to Pierre Cartier that same year.

In 1910 the Hope diamond was shown to Mrs. Evalyn Walsh McLean, of Washington D.C., at Cartier's in Paris, but she did not like the setting. Cartier had the diamond reset and took it to the U.S. where he left it with Mrs. McLean for a weekend. This strategy was successful. The sale was made in 1911 with the diamond mounted as a headpiece on a three-tiered circlet of large white diamonds. Sometime later it became the pendant on a diamond necklace as we know it today. Mrs. McLean's flamboyant ownership of the stone lasted until her death in 1947.

Harry Winston Inc. of New York City purchased Mrs. McLean's entire jewelry collection, including the Hope diamond, from her estate in 1949. This collection also included the 94.8-carat Star of the East diamond, the 15-carat Star of the South diamond, a 9-carat green diamond, and a 31-carat diamond which is now called the McLean diamond.

For the next 10 years the Hope diamond was shown at many exhibits and charitable events world wide by Harry Winston Inc., including as the central attraction of their Court of Jewels exhibition. On November 10, 1958, they donated the Hope diamond to the Smithsonian Institution, and almost immediately the great blue stone became its premier attraction.

The Hope diamond has left the Smithsonian only four times since it was donated. In 1962 it was exhibited for a month at the Louvre in Paris, France, as part of an exhibit entitled Ten Centuries of French Jewelry. In 1965 the Hope diamond traveled to South Africa where it was exhibited at the Rand Easter Show in Johannesburg. In 1984 the diamond was lent to Harry Winston Inc., in New York, as part of the firm's 50th anniversary celebration. In 1996 the Hope diamond was again sent to Harry Winston Inc., in New York, this time for cleaning and some minor restoration work.

The weight of the Hope diamond for many years was reported to be 44.5 carats. In 1974 it was removed from its setting and found actually to weigh 45.52 carats. It is classified as a type IIb diamond, which are semiconductive and usually phosphoresce. The Hope diamond phosphoresces a strong red color, which will last for several seconds after exposure to short wave ultra-violet light. The diamond's blue coloration is attributed to trace amounts of boron in the stone.

In the pendant surrounding the Hope diamond are 16 white diamonds, both pear-shapes and cushion cuts. A bail is soldered to the pendant where Mrs. McLean would often attach other diamonds including the McLean diamond and the Star of the East. The necklace chain contains 45 white diamonds.

Care of Diamonds

1. Clean the diamond. Use a soft brush, soap and water. If you do not possess a special brush for cleaning jewelry you can use an eyebrow or even a lipstick brush - these are soft, small and acceptable.
2. 2
   Before you start cleaning, make a mix of warm water and a mild detergent. Then place in the bowl, where you made the mixture, your diamond jewelry. Always use a mild cleanser to clean your diamond. Jewelry stores use a diluted ammonia to clean with. The easiest way for you to replicate this at home is by using Windex and mix it with hot water. The heat in the water will loosen up any oils on the stone.
3. 3
   Soak it for a few minutes and then scrub with a brush. An old toothbrush works best. Make sure to get under the stone as this is where the dirt and oils will gather.
4. 4
   Rinse. To rinse the diamond jewelry you can use a strainer.
5. 5
   After the cleaning use a clean cloth to dry the jewelry.

SAVE DIAMONDS

There are many places to buy diamonds from. We look and see expensive prices. Could there be a way to save? Let us find them here!

The first thing to remember is that jewelry has a high mark up price on it. That means that the retailer makes a handsome profit. The reason is that it is high priced items, and is not going to be purchased like tooth paste!

The point to remember is that diamonds by themselves attract a certain amount of money, and the result is that these diamonds are likely to have a narrower profit margin. So the result is that it is harder to make big, big savings on these. Though there is room to make savings.

For example, the jewelry with diamonds may likely have the possibility of a 50% saving, however a diamond could have a maximum saving of 5%.

To make savings, there are some routes to go. For example, try visiting several stores, and see what they have. This will bring out a bigger selection, as well as be able to make bigger savings.

The next place to look is online. There are many stores online, and they generally have the ability to offer a wider range of products than you would at first find in a jewelry store.

These places often come with big savings. To make the savings, visit several stores, and you will find a big selection, as well as a big saving.

It can be done in a much quicker time than visiting local stores. In fact by time you visit one store, it is possible to go through 5 or 10 stores online and make big savings on your next purchase. So save with diamonds!

FOREX SHOWN

Overall, the major pairs saw some minor spikes in price as the new trading week began. During the session, Japan released a report detailing their preliminary gross domestic product which has been shown to have increased to 1.2 percent over analysts estimates of 0.7 percent.

The euro (Eur/Usd 1.4957) opened the new trading week 10 pips higher as the pair raced ahead to the R1 swing point at 1.4965 which stopped the pair in its tracks. The gap, although minor, may still be closed if the pair decides to test the 20 day moving average at 1.4885.

The pound (Gbp/Usd 1.6712) along with the cad has had the largest gap, by nearly 20 pips. The pair was also rejected from the R1 swing level at 1.6740 during the overnight session. Support for the pair lies at the 1.6630 level while 1.6850 is major resistance.

The aussie (Aud/Usd 0.9333) is the second pair to successfully close its gap during the overnight session. The pair is finding minor support at the 0.9330 area which is near the high from Friday and resistance for the pair is seen at 0.9365.

The cad (Usd/Cad 1.0503) had a large 20 pip gap at the start of trading but was the first pair to close the gap quickly. The pair spent last Friday in a steady downtrend after being rejected from the 20 day moving average.

The swissy (Usd/Chf 1.0089) and the yen had virtually no change from their closing prices on Friday. The swissy has spent the session strengthening and finding support near the 1.0085 level which coincides with the S1 swing level.

The yen (Usd/Jpy 89.47) is following the swissy in that it has spent the session strengthening after a dramatic fall last Friday. The pair has mild resistance at 89.80 while the most immediate support is at the 89.35 level.

Markets throughout Asia were trading in mixed fashion. The Japanese Nikkei was declining slightly at the start of the week by 17 points while the Australian S&P/ASX was advancing 29 points higher. There are more stocks declining on the Nikkei 225 than were advancing. Encouraging results from the retail sector in the US on Friday has helped exporters. Toyota Motors has advanced 0.30 percent while financials such as Mizuho Financial declined 2.23 percent.

Meanwhile, overnight the Cabinet Office in Japan has released the preliminary gross domestic product which has increased to 1.2 percent for the quarter, the second consecutive expansion after the nation's worst recession.

Also released was a report on the Rightmove house price index from the UK. This report has shown that home sellers have decreased their asking prices during November for the first time the previous three months. Demand for property has dropped as the year comes to a close.

The MSCI Asia Pacific Index has gaining 0.44 points or 0.37 percent during the session.

Overnight, the Japanese Nikkei has declined 17.65 points (0.18%) to 9,752.66. The Australian S&P/Asx was advancing 29.50 points (0.63%) to 4,735.90.

Crude oil was recently trading at $76.99 per barrel, higher by $0.64. The commodity found resistance near the 20 day moving average.

Gold was recently surging higher by $7.80 to $1,124.50. The precious metal has broken above resistance previously seen at the 1120 level.