06 Apr 2016

Coloured diamonds continue to outperform at auction

“People are aware that [pink diamonds] are an amazing investment…stones like this come to the market once every few years, and many wealthy people are looking for something unique — and that’s why the price is going up all the time.”

Coloured diamonds are a billionaire’s best friend is not quite as catchy a lyric as Marilyn Monroe’s husky rendition, but it is fast becoming the theme tune for the world’s auction houses.

Sotheby’s is set to auction the “Unique Pink”, a 15.38 carat “fancy vivid” pink diamond, in Geneva on May 17 with a sales estimate of US$28m-$38m.

The auction is the latest in a series of sales of coloured diamonds that have broken records around the world. In Hong Kong this week, the De Beers Millennium blue diamond fetched US$31.8m — the highest price recorded for a jewel at auction in Asia.

vivid-blue-de-beers-millennium-jewel-4-weighing-10-10-carats-1

Vivid Blue ‘De Beers Millennium Jewel 4’, weighing 10.10 carats

The Blue Moon of Josephine holds the record for any diamond or gemstone. Property magnate Joseph Lau reportedly paid US$48.5m at Sotheby’s in 2015 for the blue diamond, discovered in a South African mine in 2014, for his seven-year-old daughter, Josephine.

The Graff Pink is the most expensive pink diamond to have been sold at auction, fetching US$46m at Sotheby’s in Geneva in 2010. The auction record for a colourless diamond is US$31m.

graff-pink-24-78ct-diamond

Fancy Intense Pink, named the ‘Graff Pink’, weighing 24.78 carats

“Coloured diamonds have long been sought after,” said Francois Graff, chief executive officer of Graff Diamonds. “The market began to open up in the 1980s, and in the past five to 10 years that growth has accelerated as more people have become aware of their extreme rarity and appreciative of their unique beauty.”

Pink diamonds are the most sought after, with only one stone in every 10,000 mined displaying any form of colour. According to the Fancy Color Research Foundation, since the non-profit organisation started its price index in January 2005, pink diamonds have risen in value by more than 350 per cent. By comparison, gold has risen by just over 160 per cent and the S&P 500 by 66 per cent.

“People are aware that [pink diamonds] are an amazing investment,” said Eden Rachminov, a diamond specialist and author of The Fancy Color Diamond Book. “Stones like this come to the market once every few years, and many wealthy people are looking for something unique — and that’s why the price is going up all the time.

Blue and yellow diamonds have been equally successful at auction and as an investment. Over the 11-year period tracked by the FRCF they have risen in value 180 per cent and 54 per cent respectively.

“There’s a lake of cash around at the moment,” said David Bennett, worldwide chairman of Sotheby’s international jewellery division. “When someone sees a vivid pink or a vivid blue, they are generally in awe of it — and it becomes an object of desire.”

Source: Financial Times

Share this