Diamond News Archives

Goldman Sachs is worried that inflation could rise faster than expected, and urged policymakers to take action to avoid “a dangerous overheating.”

Their recommendation: five more 25 basis point hikes before assessing whether further hikes are necessary.

The U.S. economy showed no sign of slowing in October, as Friday’s jobs report showed payrolls growing by 250,000 and unemployment holding steady at 3.7%. But it was wage growth of 3.1% year-over-year that had economists wondering if the Fed now sees inflation near its 2% target.^[1]

Goldman’s Jan Hatzius wrote Sunday that unemployment should continue to decline to 3% by early 2020, noting the labor market also has room to accommodate more wage growth. Hatzius predicted that average hourly earnings would likely grow in the 3.25% to 3.50% range over the next year.

That rapid pace of wage growth could set the Fed up for a “meaningful overshoot” of its 2% inflation target.

“If unemployment is (perhaps well) below 3.50% and inflation above 2%, we think Fed officials will need to be quite confident that growth will stay at or below trend to sound an all-clear on further rate increases, which could translate into a large easing in financial conditions and a return to growth rates well above trend,” Hatzius wrote.

Hatzius wrote that the economy needs to slow to avoid overheating, and worries that inflation could run away if the Fed does not take action. For now, Goldman has a baseline forecast of 2.3% for core PCE — which it noted as within the Fed’s comfort zone — but warned that inflation is poised to move higher on President Donald Trump’s tariffs.

The note also warned that with the labor market continuing to tighten, inflation will likely push...

(IDEX Online) – Israeli law enforcement officials say they want to question Lev Leviev, the business tycoon whose companies are reportedly at the center of a diamond smuggling ring that operated over years. <?xml:namespace prefix = "o" ns = "urn:schemas-microsoft-com:office:office" /?>

Among six people police detained for questioning under caution on Monday are two of his relatives, and four other people who are or had been involved in his companies in Israel and Russia, according to the Ha'aretz newspaper. Police have asked the court to extend the detention of the six suspects.

A source near Leviev said he may return to Israel voluntarily for questioning, according to the report.

The arrests followed the capture of a smuggling "mule" at Israel's Ben-Gurion International Airport some months ago. That led to a joint police and customs investigation, following which the state suspects that for years, people working for Leviev were involved in smuggling diamonds worth tens or possibly hundreds of millions of shekels (in total) into Israel.

Leviev's company LLD stated: "Mr. Leviev and companies he controls operate in keeping with the appropriate norms, and in compliance with the law. We hope the issue will be cleared up quickly and that the suspicions will prove to be groundless."

The police and tax authorities suspect money-laundering, offenses against various tax laws, conspiring to commit a crime, forging documentation, fraud, and other crimes, the report said.

The investigation began a few months ago when Customs officers at Ben-Gurion Airport by Tel Aviv caught a man, associated with Leviev's business group, allegedly trying to smuggle diamonds worth hundreds of thousands of shekels...

CARACAS (Reuters) - Venezuela is seeking to repatriate about $550 million in gold bars from the Bank of England because of fears it could be caught up in international sanctions on the country, two sources with direct knowledge of the effort told Reuters.

Venezuela’s hard currency holdings have dwindled as existing U.S. financial sanctions have effectively blocked President Nicolas Maduro’s government from borrowing on international markets.

The Trump administration on Thursday issued a new round of sanctions banning U.S. citizens from having dealings with anyone involved in “corrupt or deceptive” gold sales from Venezuela, as part of efforts to boost pressure on Maduro.

Maduro’s government is seeking to bring 14 tonnes of gold held in the Bank of England back to Venezuela, according to two public officials with direct knowledge of the operation, who asked not to be identified.

The Bank of England has sought to clarify what Venezuela wants to do with the gold, one of the officials said.

Venezuela’s central bank did not respond to a request for comment. The Bank of England declined to comment.

The plan has been held up for nearly two months due to difficulty in obtaining insurance for the shipment, needed to move a large gold cargo, one of the officials said.

“They are still trying to find insurance coverage, because the costs are high,” the official said.

Venezuela is in its fifth year of...

(IDEX Online) – During the third quarter of 2018 prices of fancy color blue and pink diamonds rose by 0.7% and 0.4% respectively in all sizes and saturation levels, according to the Fancy Color Diamond Index published by the Fancy Color Research Foundation (FCRF). <?xml:namespace prefix = "o" ns = "urn:schemas-microsoft-com:office:office" /?>

At the same time, overall fancy color diamond prices showed no significant change and increased by only 0.1%, the FCRF said. Yellow fancy color diamonds showed a decrease of 1.0% in prices during the same period. Fancy vivid blue diamonds continued to outperform, rising 8.5% in the past 12 months and 1.1% in Q3 2018.

A distinctive difference in price trends was seen in the 1 carat category; pink diamonds remained stable, blue diamonds increased by 4.7%, yellow diamonds decreased by 2.2%, while intense yellow 1 carat diamond prices increased by 1.1%, the FCRF reported.

On a year-to-year basis, when compared to Q3 2017, the Fancy Color Diamond Index increased by 0.4%, with blue prices up 5.9% and yellow and pink prices down by 1.6% and 0.5%, respectively.

FCRF Advisory Board member Eden Rachminov said, “In my opinion, the price of fancy yellow is influenced by the general mood of many diamond traders that carry a mixed inventory of colorless and yellows. Due to the slowdown in the colorless business and to compensate in their general turnover, these traders slightly lower the prices of yellows.”...