DIAMONDS GALLERY

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The Kazanjian Red Diamond - A 5.05 Carat Assscher Cut

Last week The Kazanjian Foundation hosted an exclusive private showing of the Kazanjian Red Diamond which is considered to be the finest red diamond in the world. The event was held at the perfect venue, the gemological wing of the Los Angeles Natural History Museum.

Not only was the diamond spectacular to view, the history of the gemstone was fascinating to learn.

-Discovered in 1927 in South Africa

-Considered to be one of the rarest Diamonds in the world, of which Red is the rarest color

-Owned by the Oppenheimer and Asscher Families

-Represented by Tiffany in the 1930s

-Plundered by the Nazis during World War II

-Recovered in a salt mine near Berteschgaden by a U.S. Army General who mistook it for a ruby

-Rediscovered in 2007 by The Kazanjian Family

Ian Balfour, the world's diamond authority, has written in the latest edition of his book Famous Diamonds, an excellent history of the rare stone which will be on display at the museum from now until the end of the year.

Also on display at the event was the Kazanjian Foundation Collection of Celebrity Jewels and the Couture Jewelry Collection by Patrick Mauboussin.

And yes, elegant guests (some in beautiful Beladora estate jewelry), great food by Crustacean Beverly Hills, and lovely music by the Southeast Symphony...what can I say...the party rocked!

Oh, and in case you are looking for that special gift for this holiday season...the Kazanjian Red isn't for sale.

Hardness

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Diamond is the hardest known naturally occurring material, scoring 10 on the relative Mohs scale of mineral hardness and having an absolute hardness value of between 167 and 231 gigapascals in various tests. Diamond's hardness has been known since antiquity, and is the source of its name. However, aggregated diamond nanorods, an allotrope of carbon first synthesized in 2005, are now believed to be even harder than diamond.

The hardest diamonds in the world are diamonds from the New England area in New South Wales, Australia. These diamonds are generally small, perfect to semiperfect octahedra and are used to polish other diamonds. Their hardness is considered to be a product of the crystal growth form, which is single stage growth crystal. Most other diamonds show more evidence of multiple growth stages, which produce inclusions, flaws and defect planes in the crystal lattice all of which affect their hardness (Taylor et al. 1990).

Industrial use of diamonds has historically been associated with their hardness; this property makes diamond the ideal material for cutting and grinding tools. It is one of the most known and most useful of more than 3,000 known minerals. As the hardest known naturally occurring material, diamond can be used to polish, cut, or wear away any material, including other diamonds. Common industrial adaptations of this ability include diamond-tipped drill bits and saws, or use of diamond powder as an abrasive. Other specialized applications also exist or are being developed, including use as semiconductors: some blue diamonds are natural semiconductors, in contrast to most other diamonds, which are excellent electrical insulators. Industrial-grade diamonds are either unsuitable for use as gems or synthetically produced, which lowers their price and makes their use economically feasible. Industrial applications, especially as drill bits and engraving tools, also date to ancient times.

The hardness of diamonds also contributes to its suitability as a gemstone. Because it can only be scratched by other diamonds, it maintains its polish extremely well, keeping its luster over long periods of time. Unlike many other gems, it is well-suited to daily wear because of its resistance to scratching—perhaps contributing to its popularity as the preferred gem in an engagement ring or wedding ring, which are often worn everyday.

Toughness

Unlike hardness, which only denotes resistance to scratching, diamond's toughness is only fair to good. Toughness relates to a material's ability to resist breakage from forceful impact. As with any material, the macroscopic geometry of a diamond contributes to its resistance to breakage. Diamonds cut into certain particular shapes are therefore more prone to breakage than others.

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Crystal structure

Diamonds typically crystallize in the cubic crystal system and consist of tetrahedrally bonded carbon atoms. Lonsdaleite is a polymorph of diamond (and a distinct mineral species) that crystallizes with hexagonal symmetry; it is rarely found in nature, but is characteristic of synthetic diamonds. A cryptocrystalline variety of diamond is called carbonado. A colorless, grey or black diamond with a tiny radial structure is a spherulite.

The tetrahedral arrangement of atoms in a diamond crystal is the source of many of diamond's properties; graphite, another allotrope of carbon, has a rhombohedral crystal structure and as a result shows dramatically different physical characteristics—contrary to diamond, graphite is a very soft, dark grey, opaque mineral.

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Diamond supply chain

The diamond supply chain is controlled by a limited number of powerful businesses, and is also highly concentrated in a small number of locations around the world. In fact, the amount of power which De Beers has consolidated historically prevented it from direct trade with the United States, as its trade practices led to an indictment for violating antitrust regulations (the case was settled in 2004). The concentration of power only loosens at the retail level, where diamonds are sold by a limited number of distributors, known as sight-holders, to jewelers around the world.

Sources

Historically diamonds were known to be found only in alluvial deposits in southern India; India led the world in diamond production from the time of their discovery in approximately the 9th century BCE to the mid-18th century CE, but the commercial potential of these sources has been exhausted. The first non-Indian diamond source was found in Brazil in 1725. Today, most commercially viable diamond deposits are in Africa, notably in South Africa, Namibia, Botswana, the Republic of the Congo, Angola and Sierra Leone. There are also commercial deposits being actively mined in the Northwest Territories of Canada, Siberia (mostly in Yakutia territory, for example Mir pipe and Udachnaya pipe), Brazil, and in Northern and Western Australia. Diamond prospectors continue to search the globe for diamond-bearing kimberlite and lamproite pipes.

In some of the more politically unstable central African and west African countries, revolutionary groups have taken control of diamond mines, using proceeds from diamond sales to finance their operations. Diamonds sold through this process are known as conflict diamonds or blood diamonds. In response to public concerns that their diamond purchases were contributing to war and human rights abuses in central Africa and west Africa, the diamond industry and diamond-trading nations introduced the Kimberley Process in 2002, which is aimed at ensuring that conflict diamonds do not become intermixed with the diamonds not controlled by such rebel groups.

The Kimberley Process provides documentation and certification of diamond exports from producing countries to ensure that the proceeds of sale are not being used to fund criminal or revolutionary activities. Although the Kimberly Process has been somewhat successful in limiting the number of conflict diamonds entering the market, conflict diamonds smuggled to market continue to persist to some degree.

Currently, gem production totals nearly 30 million carats (6,000 kg) of cut and polished stones annually, and over 100 million carats (20,000 kg) of diamonds are sold for industrial use each year. In 2003, this constituted total production of nearly US$9 billion in value.

Gold in investment portfolios

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As a tangible investment gold is sometimes held as part of a portfolio because over the long term gold has an extensive history of maintaining its value. It has in the last century gained ground in relation to fiat currencies owing to inflation. Gold becomes particularly desirable in times of extremely weak confidence and during hyperinflation because gold maintains its value even as fiat money becomes worthless. People who enjoy investing in gold are known as goldbugs.

Futures contracts based on gold currently trade on various exchanges around the world. In the US this occurs primarily on COMEX (Commodity Exchange) which is a subsidiary of the New York Mercantile Exchange. Speculation about the future price of gold and other commodities is carried on at COMEX. Recently, gold-based ETFs like GLD have emerged as a more convenient investment vehicle.

In some countries such as Switzerland, it is possible to hold physical gold as part of an investment portfolio, due to the absence of taxes and narrow bid-ask spreads, however in other countries portfolio managers sometimes hold gold shares or gold bullion securities as a proxy for the metal itself. Exchange Traded Funds such as Gold Bullion Securities are securities sponsored by the World Gold Council and which are fully backed up by allocated gold held by a custodian. The main Gold Bullion Securities are as follows:

New York Stock Exchange (NYSE), Symbol:GLD (Streettracks Gold Shares, ISIN No. US8633071043)
London Stock Exchange (LSE) Symbol GBS (Gold Bullion Securities ISIN No. GB00B00FHZ82)
Euronext France Symbol:GBS (Gold Bullion Securities ISIN No. GB00B00FHZ82 )
Australian Stock Exchange (ASX), Symbol:GOLD (Gold Bullion Securities ISIN No. AU00000GOLD7)
Johannesburg Securities Exchange (JSE), Symbol:GLD (New Gold Debentures ISIN No. ZAE000060067 )

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Restrictions on gold ownership

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Because of its use as a reserve store of value, the possession of gold is sometimes restricted or banned. Within the United States, the private possession of gold except as jewelry and coin collecting was banned between 1933 and 1975. President Franklin D. Roosevelt expropriated gold by Executive Order 6102, and President Richard Nixon closed the gold window by which foreign countries could exchange American dollars for gold at a fixed rate.

Gold and the money supply

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In January 1959 US M3 money supply was $288.8 billion, and the Official Gold Holdings of the United States was then 17,335.1 Tonnes, or about 557 million ounces (there are 32,150.7 Troy Ounces in a Tonne). That means that in 1959, there were $518 in circulation for every ounce of gold reserves held by the USA. Although the theoretical price should then have been $518 per ounce, the actual price, as fixed under the gold standard was only $35 an ounce.

By August 2005, the US M3 money supply had risen to $9,873.9 billion, whilst at the same time the Official Gold Holdings of the United States had fallen to just 8,133.5 Tonnes, or about 261 million Troy Ounces. This means that today, in 2005, there are $37,831 in circulation for every ounce of gold held by the United States.

The above numbers show the falling influence of gold in the monetary system of the world today. Goldbugs believe, or even hope, that one day gold's importance will return as the printing of paper money gets out of control and we end in a hyper-inflationary fiat money collapse.

VALUE

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Like other precious metals, gold is measured by troy weight and by grams. When it is alloyed with other metals the term carat or karat is used to indicate the amount of gold present, with 24 carats being pure gold and lower ratings proportionally less. The purity of a gold bar can also be expressed as a decimal figure ranging from 0 to 1, known as the millesimal fineness, such as 0.995.

The price of gold is determined on the open market, but a procedure known as the Gold Fixing in London, originating in 1919, provides a twice-daily benchmark figure to the industry.

Historically gold was used to back currency in an economic system known as the gold standard in which one unit of currency was equivalent to a certain weight of gold. As part of this system, governments and central banks attempted to control the price of gold by setting values at which they would exchange it for currency. For a long period the United States government set the price of gold at $20.67 per troy ounce ($664.56/kg) but in 1934 the price of gold was set at $35.00 per troy ounce ($1125.27/kg). By 1961 it was becoming hard to maintain this price, and a pool of US and European banks began to act together to defend the price against market forces.

On March 17, 1968, economic circumstances caused the collapse of the gold pool, and a two-tiered pricing scheme was established whereby gold was still used to settle international accounts at the old $35.00 per troy ounce ($1.13/g) but the price of gold on the private market was allowed to fluctuate; this two-tiered pricing system was abandoned in 1975 when the price of gold was left to find its free-market level. Central banks still hold historical gold reserves as a reserve asset although the level has generally been declining. The largest gold depository in the world is that of the U.S. Federal Reserve Bank, in New York.

Since 1968 the price of gold on the open market has ranged widely, with a record high of $850/oz ($27,300/kg) on 21 January 1980, to a low of $252.90/oz ($8,131/kg) on 21 June 1999 (London Fixing). Prices have risen to the $500/oz mark in late 2005, due to a depreciation of the US dollar and inflation due to rising energy costs.In January 2006 the goldprice rose above $555/oz and many observers think that fears of a nose-diving dollar will send the price of gold even much higher.

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The European exploration of the Americas was fueled in no small part by reports of the gold ornaments displayed in great profusion by Native American peoples, especially in Central America, Peru, and Colombia.

Gold has long been considered one of the most precious metals, and its value has been used as the standard for many currencies (known as the gold standard) in history. Gold has been used as a symbol for purity, value, royalty, and particularly roles that combine these properties.

Gold in antiquity was relatively easy to obtain geologically; however, 75% of all gold ever produced has been extracted since 1910. It has been estimated that all the gold in the world that has ever been refined would form a single cube 20 m (66 ft) a side.

The primary goal of the alchemists was to produce gold from other substances, such as lead — presumably by the interaction with a mythical substance called the philosopher's stone. Although they never succeeded in this attempt, the alchemists promoted an interest in what can be done with substances, and this laid a foundation for today's chemistry. Their symbol for gold was the circle with a point at its center (☉), which was also the astrological symbol, the Egyptian hieroglyph and the ancient Chinese character for the Sun (now 日).

During the 19th century, gold rushes occurred whenever large gold deposits were discovered, including the California, Colorado, Otago, Australia, Witwatersrand, Black Hills, and Klondike gold rushes.

Because of its historically high value, much of the gold mined throughout history is still in circulation in one form or another.

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