Now that the Cullinan Dream Diamond has sold but may or may not have been paid yet, we can look at its value in more details, again.

Estimate Vs. True Value

The Cullinan Dream has been estimated to be worth between $23 million and $29 million. There was an obvious financial interest by Christie’s to get it to auction. At the end, it was sold for $22.5 million before the commission and other fees, and ended up selling on the books for $25.365 million or $1.05 million per carat. On one hand, the total price paid broke a world record for a Fancy Intense Blue diamond total price. Is that really a surprise? Since it is a massive 24.18 carats in size…

A price of $1.05 million per carat is quite terrible for such a size, yet not surprising. why?

The “Cullinan Dream” Ring    Image Courtesy: Christie’s

Importance of a Fancy Color Diamond

We know that the most important aspect of a Fancy Color Diamond is the color. Intensity and depth of color will reflect on the value. We have seen a few Fancy Intense Blue Diamonds sell at auction in the last few months that have sold well above          $1 million per carat, yet were much smaller than the “Cullinan Dream”. The color depth of the “Cullinan Dream” was very weak, in fact, was closer to a strong Fancy Blue. I have seen many Fancy Intense Blue diamonds, where the color was borderline Vivid, which were much smaller than the “Cullinan Dream”, and that are more valuable.

The other important aspect of the value was clarity. The “Cullinan Dream” had a VS2 clarity, although rare, but was still quite disappointing to see. Such a rare size rough (122ct+) should have yielded a superior clarity and less of a size. I think that would have garnered a higher price, both overall and per carat.

The rough diamond, the Provenance of the “Cullinan Dream” Diamond    Image Courtesy: Petra Diamonds

Investors have been outbidding prices on unique diamonds and that were of superior clarity.

Fancy Intense Blue Diamonds with higher valuation

We have seen quite a few Fancy Intense Blue Diamonds sold in recent months that garnered a higher per carat price. Most notably is the 1.74 carat, Fancy Intense Blue with a VVS1 clarity, potential IF. The media totally missed out on that one.

The 1.74 carat, Fancy Intense Blue Diamond Sold for a record price    Image Courtesy: Christie’s

We also have the 6.64 carat Fancy Intense Blue Diamond by Alexandre Reza sold at the recent Sotheby’s Auction in Geneva.
It was an even lower clarity of SI1, and 2 smaller Fancy Intense blue of 2.01 carats and 1.01 carats with VVS2 and VS2 clarities respectively, yet garnered higher price per carat then the “Cullinan Dream”, signalling again, that color dominates the importance scale of how valuation works.

Alexandre Reza Brooch, with the 6.64 carat, Fancy Intense Blue diamond   Image Courtesy: Sotheby’s

We also have the 6.03 carat Fancy intense bLue diamond that sold at that same auction, with an IF clarity, and got $955k per carat, only 10% less than the “Cullinan Dream” yet, it had no provenance. Simply because color was better and clarity also played an important role here.

The 6.03 carat, Fancy Intense Blue Diamond   Image Courtesy: Sotheby’s

At the end of the day, as you can see, just like there are two sides to every coin, there are also many ways to analyse a diamond. The most important element is objective of the buyer, his reason for the acquisition, and getting an independent third party to help with the decision making in the best interest of the purchasing party.