June 23, 2017, 9:54 am

Auctions Build Anticipation (And Investment Interest) for Fancy Colored Diamonds

by: The Financial Blogger    Category: Investment, Market and Risk
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Fancy color diamonds from the Aurora Butterfly of Peace Diamond Collection, ranging from 0.62 to 2.00 ct. Courtesy of Alan Bronstein and Aurora Gems.

Just when you think the market for fancy colored diamonds can’t get any hotter… it does.

This year has seen some notable gem auctions by high-end auction houses and jewelers. And while it’s not just diamonds to go on the block – stunning sapphire, emerald and jade creations have been among the touted pieces – it’s the colored diamonds that have captured the attention and opened the pocketbooks of the most discerning investors.

Indeed, the market for the comparatively scarce fancy colored diamonds has been booming for a number of years. The value of colored diamonds generally has grown 142 percent over the last decade, while the value of fancy pink colored diamonds has really soared, up 315 percent, according to The Fancy Color Research Foundation. Blues, meanwhile, have experienced a surge of 154 percent.

This has all created a lot of anticipation each time another diamond auction is announced, and small wonder, given the records the sales are setting. Among the events that have set this year’s pace:

  • The Pink Star sale by Sotheby’s at its April auction in Hong Kong may have been the event of the year – if not the decade. The Pink Star is the stunning 59.6 carat diamond that is the largest flawless fancy vivid pink ever to have been graded by the Gemological Institute of America. The winning bid of $71.2 million by Hong Kong jeweler Chow Tai Fook smashed all previous world records for any diamond or jewel – even if it fell short of an earlier $83 million failed bid by New York diamond cutter Isaac Wolf.
  • Bonhams New York auction, also in April, may not have featured a marquee draw like the Pink Star, but still offered enough variety to entice a crowd. Fancy colored diamonds were the highlight of the lot, but also of interest were signed pieces by Cartier, Art Deco items and statement sapphires and emeralds. A fancy vivid yellow diamond and diamond ring (valued at $400,000 to $600,000) was the sale’s top piece. It was notable for its unusual old-fashioned cutting style that showcased its brilliance and depth of color.
  • Christies, too, has been showcasing colored diamonds alongside other gems in its auctions, and its most recent, the Hong Kong Magnificent Jewels Sale in May, lived up to its billing. The auctions provided an exciting selection of magnificent gems. The top piece was an exceptional fancy vivid blue diamond ring by Moussaieff, highlighted by a pink diamond surround, valued at between $8 million to $10 million. Another noteworthy auction piece was a rare platinum and gold bracelet of colored and white diamond florets – each flowerhead featuring a oval-shaped pink diamond at its center, with the clasp featuring a blue one. It was valued at between $2.8 million to $3.8 million.

Although details are not yet known, there’s also a high level of anticipation building over a similar planned showcase of fancy pink diamonds – the 2017 Argyle Pink Diamond Tender. This invitation only-event provides an opportunity to appreciate and bid on some of the rarest stones produced by the Rio Tinto Group’s Argyle Mine. It’s the source of 90 percent of the world’s high quality pink diamonds.

Events like these underscore the unabated enthusiasm for diamonds – and colored diamonds especially – as a likely option for discerning investors.

There’s more demand for them among investors these days. But they get an added bonus as their investment is in an asset that is also a stunning piece of jewelry, notes Michael King, Director of Trading at Paragon International Wealth Management, a Toronto-based firm that is a leader in acquiring and managing hard investment assets, with a specialty in fancy colored diamonds. Paragon International Wealth Management’s King also adds that, “They’re [colored diamonds] long-term investments with a great return — often many times over their original price.

 

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