This year’s diamond and jewelry auctions around the world have resulted in a mixed and emotional position for fancy color diamonds. Although many momentous pink diamonds and blue diamonds went under the hammer (no red diamonds this year), buyers mostly did not pay beyond the auction houses’ respective highest estimates for them. Although it did occur in some cases, one of the ways that investors are able to understand the urgency of the market is by how far buyers are willing to go to acquire them. The year in auctions will culminate on December 6, 2017, the last diamond and jewelry auction for the 2017 season which will take place at Christie’s in NY. It will be showcasing some beautiful fancy color diamonds, which most likely will not break any further records that have not already been broken earlier this year. For the most part, the diamonds at the auction are loose and not set as unique pieces of jewelry – more on that below. First, let’s analyze the top fancy color diamonds that will be offered that evening.
A Green Diamond
The first item that we will review is a rare Fancy Intense Green diamond set in a ring. It weighs 2.13 carats, has VS2 clarity, and is a modified square brilliant cut. From the looks of it, the strong color in the diamond is concentrated in the middle (called the crown). In order to decide if this diamond would be worth investing in, we have to carefully review the diamond’s appearance to ensure that the color is evenly distributed. At a $500k to $700k total value, it may be too highly valued by the seller for me to choose to invest in it. This diamond has to be further examined to see if it is truly worth its price.
The 2.13 carat Fancy Intense Green VS2 modified square brilliant diamond Image credit: Christie’s
This pair of Fancy Pink diamonds are both pear shaped and each weighs 1.52 carat and 1.51 carat, respectively. One has an IF and the other has a VS2 clarity, and they are set in a pair of earrings. The pair are valued together at $340k to $540k total, or $112k to $178k per carat, which is the value range that they should be according to the fancy color diamond market. Perhaps as an added measure of value, we can take into account that it is an enormous challenge to find a matching pair of fancy color diamonds.
The 1.52 carat and 1.51 carat Fancy Pink pear shaped diamonds Image credit: Christie’s
The other pink diamond that we will analyze is extremely different due to its secondary color, which changes the appearance of the diamond immensely, and subsequently, its investment potential. It is a 4.38 carat Fancy Orange Pink VVS2 marquise shaped diamond set in a ring. The pink diamond is valued at a final price point between $420k to $520k, or $96k to $118.7k per carat. Due to the size of its diamond and its clarity, the valuation makes sense. While it may be a pink diamond, which sell for a much higher price per carat, especially at this carat weight and clarity level, it is important to remember that there is an orange secondary tone to it. This reduces the value by half of the value of a non-orangey pink diamond, like one with a purple overtone.
The 4.38 carat Fancy Orange Pink VVS2 marquise shaped diamond Image credit: Christie’s
Blue diamonds are a crucial money maker at auctions, and the auction houses are very particular to do their best to find at least one for the auction lineup, although they do not always succeed. Ever since the 9.75 carat Fancy Vivid Blue “Zoe” diamond sold for a record price at auction, blue diamonds have been breaking records year after year – any investors’ dream. Blue diamonds have continued this trajectory and diamond investors are keen to own any blue diamond that they can find as long as it has excellent color, a good size and good clarity. At this auction, a superb pair of Fancy Vivid Blue diamonds by London jewelers Graff Diamonds are being offered. Both are graded Fancy Vivid Blue and are pear shaped, although one weighs 3.36 carats and the other is 2.71 carats. They are set together in a ring, and one has VVS2 clarity while the other has VS1 clarity (included is a working diagram indicating that both are potentially Internally Flawless if they were to undergo a re-polish). In order to ensure that the re-polish process is financially wise, we would have to carefully review and assess the loss of weight for each diamond that would occur for them to ultimately reach Internally Flawless clarities. This review is an important part of the process when determining whether a diamond is worthy of investment. The value of the pair of blue diamonds is estimated to reach between $6.5 million and $8.5 million, or $1.07 million to $1.4 million per carat. I am keeping the valuation simple here, but in reality, they should be analyzed differently. Fancy color diamonds, especially blue diamonds, are evaluated based on carat weights and the two diamonds are in very different weight categories. In addition to the carat weight factor, their clarities are very different which partially determine their worth as well.
The 2.71 carat and 3.36 carat Fancy Vivid Blue pear shaped diamonds Image credit: Christie’s
What Could be Wrong with Christie’s Fancy Color Diamonds?
I am somewhat disappointed with a few things with this auction. However, my main disappointment is the fact that Christie’s is mostly offering loose colorless diamonds. This makes it feel less like this is an auction full of unique, desirable and attractive diamonds and more like a garage sale. Investors and buyers on the hunt for amazing diamonds notice when a diamond is being sold the way it is, or if the seller has taken the time to lovingly display the diamond in a creative or at least noticeable way. Even just as recently as last week in Geneva, Swiss jewelers de Grisogono offered the largest ever D color Flawless diamond ever sold at auction. However, they did not simply display it the way it is – they designed a complicated necklace of emeralds and colorless diamonds to really make the center diamond shine. This kind of care is noticed and can affect a diamond’s final sale price. Do you agree that loose diamonds are treated differently at auction than jewelry? Is there a reason why this was the type of diamonds that Christie’s was able to obtain for their auction in NY? Tell us what you think in the comments!
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