gold, gold, gold, crypto coins, blockchain and diamonds

What happened, what may happen

For those interested in the yellow metal, the World Gold Council recently released two documents on the 2017 gold market events and on the outlook for 2018. We all now how forecasts work (I have just read and quote “if you have to forecast, forecast a lot“). Even so, the more you read and know, the better (provided you have a critical knowledgeable mind). The documents are available for download at WGC’s website or from here:

In another issue, a World Gold Council report states that:

  • Cryptocurrencies are no substitute for gold. In a summary of their report, WGC says”Bitcoin’s parabolic price rise was the big story of 2017 – putting the spotlight on the cryptocurrency market. While gold’s performance was a solid 13%, it was a fraction of the 13-fold increase of bitcoin by the end of the year.
    Some commentators went as far as to claim cryptocurrencies could replace gold. Cryptocurrencies may become an established part of the financial system. But, in our view, gold is very different from cryptocurrencies, as gold:

    • is less volatile
    • has a more liquid market
    • trades in an established regulatory framework
    • has a well understood role in an investment portfolio
    • has little overlap with cryptocurrencies on many sources of demand and supply. 

    These characteristics underpin gold’s role as a mainstream financial asset that will likely continue to resonate in today’s digital world.

Diamonds as an investment is no longer news; it’s been around since the oil crises of the seventies. There has been some evolution recently, related to the blockchain technology and crypto coins:

  • De Beers, has announced that “it is progressing development of the first blockchain technology initiative to span the diamond value chain and provide a single, tamper-proof and permanent digital record for every diamond registered on the platform.” Read more here, at IDEX.
  • The Israel Diamond Exchange (IDE) unveiled a new diamond-backed digital coin at IDWI (international Diamond Week in Israel). “The Israel Diamond Exchange and startup CARATS.IO have unveiled a new diamond-based crypto currency called CDC (Carats.io Diamond Currency), which they created together. The new coin was unveiled yesterday (Monday) at the International Diamond Week in Israel (IDWI – February 5 – 7, 2018). The trade in the crypto currency will be based on a new index, presented yesterday for the first time, which will reflect the daily trends in the diamond trade at the IDE. The index will be updated daily on big LED screens, which will be set at the Trading Hall. The index will reflect diamond prices set according to 14 parameters for comparing diamond prices”. To know more, just read here, at IDE’s website.
    According to Founder and CEO Avishai Shoushan, CARATS.IO’s extensive ecosystem of products will elevate the entire diamond industry. CARATS.IO is creating two separate cryptocurrencies, each backed by diamonds purchased on the Israel Diamond Exchange. One coin, called CUT (Carat Utility Token), will be used specifically in B2B transactions between eligible diamond traders. This currency will enable safe peer-to-peer transactions, altogether eliminating the need for financial intermediaries. The second currency, called CARAT, is meant for the wider market of financial institutions and digital currency investors. Both currencies will be backed by diamonds, with a market cap coverage of 25 percent, significantly reducing their speculative level of investment.“, in previous news.

THE DIAMOND INSIGHT REPORT – DE BEERS 2015

The Diamond Insight Report 2015 has just been released by De Beers, with a positive starting note.

Do you agree? In its Foreword, the report starts by saying that:

The launch of The Diamond Insight Report 2014 opened up the diamond industry to a wider audience and identified trends and opportunities for the industry to fulfil its growth potential.

One of the areas highlighted in last year’s report was how the diamond sector is influenced by seasonal demand patterns and industry cycles. And, to some extent, this effect can be seen when comparing performance in 2014 with what we have seen so far in 2015.

Strong consumer sales of diamond jewellery over the end of year holiday season in 2013 led to strong pipeline restocking demand at the start of 2014 and the positive demand environment continued through most of the year.

Consumer demand reached a record high, rough diamond demand was strong and this set the industry up for a positive year.

The report is full of information, well written and designed. It’s always worth reading.

NAMIBIA AND DE BEERS SIGN 10 YEAR DIAMOND SALES AGREEMENT

De Beers reached an agreement in principle to enter into a 10-year agreement with the Government of the Republic of Namibia for the sorting, valuing and sale of Namdeb Holdings’ diamonds. The De Beers news release may be seen by clicking here.

DE BEERS’ ROUGH DIAMOND PRICES DECREASE

According to http://www.bloomberg.com,

De Beers lowered prices by about 3 percent, with bigger reductions for certain categories, at a sale this week in Botswana, according to the people, who asked not to be identified as the information isn’t public. The miner offered about $450 million of rough diamonds at the sale, the people said.

Full story here: http://www.bloomberg.com/news/articles/2015-05-06/de-beers-said-to-cut-diamond-prices-in-surprise-blow-to-anglo

De Beers’ DIAMOND INSIGHT REPORT 2014

Released a few days ago, you may obtain the latest perspective of De Beers’ on the diamond industry: de-beers-insight-report-2014. As usual, a well written, graphically appealing, must-read report containing De Beers’ published views and expectations about the diamond industry.

De Beers (Anglo American) current perspective on the diamond industry

Love or hate them, for either good or bad reasons, but you have to acknowledge and respect De Beers (Anglo American)’s perspective on the diamond industry. Irrespective of your’s, you can read De Beers’ first hand opinion in both the:

De Beer’s Diamond Insight Report 2014 (released earlier, September 2014).

Transcript of MARK CUTIFANI, PHILIPPE MELLIER, BRUCE CLEAVER, PAT LOWERY AND GARETH MOSTYN – ANGLO AMERICAN DE BEERS SEMINAR – LONDON, 03 Nov 2014

 I have read both documents and they helped shaping my opinion. I hope it will also help you.