I was watching the auction on my phone on my sofa last night and seeing item after item going under the hammer. Some sold and some did not. When things don’t sell you start questioning the market. What does it all mean? What is the future holding? Then my basic instinct kicks in from my investment discipline and I calm myself down, and remind myself that we can’t time the market and that every sector or industry, no matter what it is, has cycles. Diamonds, Fancy Color Diamonds to be more specific, have their own cycle. Later this month, the FCRF will publish its latest finding from the last quarter and I believe that we will be pleasantly surprised. The news may reflect a contrary position to what auction results show.
Christie’s is moving forward no matter what. Looking at last night’s results, they achieved $30.3 million in sales, compared to $45.7 million last year, a 33.7% drop. Does it mean that the industry is dying? not at all. 2009 was the worst year since this auction started back in 2006 (no published information prior to 2006 for the New York Magnificent Jewels sales in April). In 2009, sales stood at $19.3 million. The highest since 2006 was 2013 at $81.4 million. In the last 5 years the average is $42 million and $49.6 million for the last 10 years. Items unsold were across the board, not just Fancy Color Diamonds.
The top lot was the twin Fancy Vivid Blue Diamond ring. The 3.06 and 2.61 carat, Fancy Vivid Blue diamonds with VS2 clarity for both and pear shape, sold for $6,744,500 total. The actual Hammer price was $5.9 million, and the rest was commission and fees. As we mentioned, both stones were quite heavy, as the depths were in the 70% to 82% range, which makes them look smaller than they are. In reality, if both had normal depth, both would be in the 2.25-2.75 weight area and should be and in fact were valued as such. The average sale price for these was $1,189,506 per carat.
The second most anticipated item was the 6.11 carat, Fancy Pink with VVS1 clarity. It was valued between $1.2 million to $1.5 million and ended up selling for $1.395 million, or $228.3k per carat. Already the valuation was conservative than where pure Fancy Pinks are valued on the market currently, but that is also due to the fact that the color was not strong, and was leaning towards an orangy secondary tone, so it was at the limit.
The 37.65 carat, Fancy Intense Yellow diamond was sold for $1,005,000 total or $26.7k per carat. The high estimate was $21k per carat.
The 35.06 carat, Fancy Intense Yellow diamond was sold for $705k or $20.1k per carat. As we said, the color was weak and it was reflected in the price. The price it was sold at reflects a 10 carat size Fancy Intense Yellow Diamond.
The 4.01 carat, Fancy Orangy Pink did not reach the minimum of $500k or $125k per carat. Currently there is quite a supply available with orangy as secondary color so there is plenty of choice. Investors prefer a pure pink diamond rather than with a secondary color (except for purplish, where it can actually complement the color overall).
The 7.55 carat and 7.51 carat, Fancy Deep Yellow diamond earrings also went back home. They did not reach the $700k minimum value set by the seller.
We are all eyes on Sotheby’s auction later today, and looking forward to see how the 3.24 carat, Fancy Intense Blue diamond with VVS1 clarity performs. Let’s take into account the greyish tone it has, which will affect the price. Investors are looking for the best and willing to pay for it. The next Christie’s auction will take place in Geneva on May 15. We look forward to attend and see how things go in real time and live.
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