It has been a glittering week for top auction houses in Geneva with colored diamonds going under the hammer for record breaking amounts in a two-day blitz of high-priced jewelry sales in the Swiss city.
Christie's auction house opened proceedings on Tuesday with the sale of a 16 carat vivid pink diamond for 26.6 million euros ($28.5 million), a record for a pink diamond at auction, to an unidentified Chinese bidder based in Hong Kong. The new owner of the cushion-shaped pink diamond promptly named the stone "The Sweet Josephine." Christie's said that only three pink stones classified by the Gemological Institute of America as "fancy" and weighing more than 10 carats have been up for sale in 250 years.
Within no less than twenty-four hours, rival auction house Sotheby's replied with its trump card, a flawless 12 carat blue diamond by the name of Blue Moon - so called because of its rarity. The gem went for 40 million euros ($43 million) on Wednesday, a record amount for a stone at auction, sealing its fate as one of the most famous diamonds the world has ever seen.
Increasing Asian demand
"Colored diamonds have seen sustained growth during the last few years," said David Bennett, head of Sotheby's international jewelry division. Indeed, experts insist that the market for such rarities has grown increasingly robust with The Knight Frank Luxury Investment Index putting the price of colored diamonds up 48 percent over the past five years.
"Demand for colored diamonds is strong from Asia right now," said Angela Berden, senior specialist at Christie's jewelry department. "Appetite from traditional markets like the US remains, but when show-stopping pieces like these come up the sale room is jam packed like a concert hall. We take bids from around the world, by phone, over the internet, from absentee bidders, and of course from the floor," she told DW.
Once such top price pieces are won, they rarely adorn their owners as an actual piece of jewelry. Both Christie's and Sotheby's point out that colored diamonds are becoming increasingly interesting as places for clients to invest their wealth as opposed to being seen as purely decorative items. "Having your money in the bank may not mean as much as it used to," said Christie´s Angela Berden. "Colored diamonds are impressive, durable and portable." In times of global volatility, the ability to easily carry millions of dollars in one's pocket may well be an attractive prospect.
Looking to invest? Spend big
The reputation for diamonds holding their worth and even increasing in value has never been resoundingly positive, and diamonds are not traded as a commodity in the same way as gold and other precious metals. But when it comes to rare blues and pinks "the demand for good quality stones has never been stronger. The last six years has seen an upward trend, and colored diamonds are unique in this way,” said Berden.
Getting your hands on one of the rare gems which will grow in worth over time requires first and foremost the bidder to be in the right place at the right time: Christie's says that only one in 100,000 diamonds has color deep enough to qualify for the term "fancy," making it intrinsically covetable.
The other prerequisite is a more than bountiful bank balance. Colored diamonds may start to be considered a cash haven only once the prices reach dizzying heights. "Prices have to be high, over 5 million euros if you are looking to see return on your investment," said Berden.
Nevertheless, as rare as such diamonds may be, record prices "show we are dealing with a very healthy stone market," according to Francois Curiel, chairman of Christie's Luxury Group. "There is lots of cash in the world right now. At the moment, works of art, diamonds and jewels are a safe haven," he added.