Poetic Diamonds-Fancy Colour Diamonds

Price wise, yellows have crashed nearly 30-40 per cent in the last 3-4 years. After Covid19 however, all prices have stabilized. There is a price correction in blues as well. Prices for pink are always rising. Argyle is the best -- in any colour, purple or blue there has been an increase in prices – values have nearly doubled Denish Shah, DdiamIn February this year, The Fancy Color Research Foundation (FCRF) reported that in the last decade, fancy colour diamonds demonstrated a stable market price with pink diamonds topping the charts, with an increase in price by 116 per cent, blue by 81 per cent and yellow by 21 per cent. And then came Corona. Like with other industries, the dreadful pandemic brought the fancy colour demand businesses across the world to a grinding halt. So much so that the FCRF for the first time since its inception, did not publish its quarterly price index. Unlike other recessions in the past, the economic crisis driven by Coronavirus is far severe, as it continues to create a logistical nightmare for manufacturers and retailers alike.

But every crisis brings with it opportunities. As the world reels in hardships caused by this pandemic, it has become increasingly evident that people who can afford luxury have become mindful of what they purchase, they want to acquire items that have lasting value, and are incredibly rare. While fancy colour diamonds were always a symbol of aspiration, status and luxury, the pandemic has led people go after these priceless jewels because of the intrinsic qualities that make them ever so exceptional.

the matter of price
Prices for fancy colour in most shades have remained stable, except for yellow. “Price wise, yellows have crashed nearly 30-40 per cent in the last 3-4 years. After Covid19 however, all prices have stabilized. There is a price correction in blues as well. Prices for pink are always rising.” says Denish Shah of Ddiam, an internationally recognized specialist and dealer of natural fancy coloured diamonds. If auctions are anything to go by, demand for rare, exceptional fancy colour diamonds has steadily increased, despite the pandemic. “Well priced fancy coloured diamonds fresh to the market are performing well at auction overall and prices have remained stable throughout the pandemic,” says Graeme Thompson, Worldwide Head of Jewellery, Phillips. Whether people want to invest in colour diamonds or not, they have been curious about their properties and thanks to their rare qualities, these gemstones are recession proof. “Prices of rare coloured diamonds haven’t been affected. They have been insulated in a way. Rare coloured diamonds have held their value through any sort of uncertain economic climate and financial volatility. Covid19 was definitely frightening for everyone globally at first, however, things are looking better, everyone has adjusted or are adjusting to this new normal. In certain categories of colour diamonds, prices have actually appreciated during the pandemic, and the world’s most sophisticated collectors are continuously searching for more.

It has worked as a lifeline to be a stockist of such rare colour diamonds, and possess such sought after gems,” says Harsh Maheshwari of Kunming Trading Co. Kunming acquired Argyle’s Everlastings Collection comprising 64 lots of carefully curated diamonds, weighing 211 carats last November.

In August, Christie’s dedicated a first-ever virtual auction completely dedicated to diamonds, where a plethora of wide variety of rare colours including pinks, grays, oranges, greens, browns and yellows headlined the auction. “Demand for coloured diamonds has always been a significant part of our business and we anticipate that will remain steady for years to come,” says Daphne Lingon, Head of Jewellery for Christie’s Americas.

The main reason for a spike in demand for coloured diamonds is as a result of the wellpublicized closure of the Argyle mine in Australia. Not only does the Argyle mine produce 95% of the world’s pink diamonds, it also produces a large amount of fancy coloured brown and yellow diamonds. Should this supply dry up by next year, which we expect it to, demand should continue to rise, therefore increasing prices further Graeme thompson, Worldwide Head of Jewellery, PhillipsFor the love of colour
The Summer Sparkle auction by Christie’s saw the sale of a gorgeous necklace by Graff suspending a 20.21 carat pear shaped yellow-brown diamond, set in a fine white diamond necklace, for $325,000. Amidst other fancy colour diamond jewels, a beautiful fancy yellow diamond 8.16cts ring and a 1 ct fancy purple-pink diamond ring were also prominent sales at the auction. “We’ve found sustained interest in coloured diamonds demonstrating that even during these unprecedented circumstances, clients continue to look for rare stones. Buying diamonds at auction has significant advantages as we offer a large selection of important and rare diamonds, colored diamonds and diamond jewellery at competitive estimates, often from private collections with interesting provenances and histories,” adds Lingon.

“The main reason for a spike in demand for coloured diamonds is as a result of the well-publicized closure of the Argyle mine in Australia. Not only does the Argyle mine produce 95% of the world’s pink diamonds, it also produces a large amount of fancy coloured brown and yellow diamonds. Should this supply dry up by next year, which we expect it to, demand should continue to rise, therefore increasing prices further ,” adds Thompson.

Educated and passionate connoisseurs of jewellery continue to see exceptional value in these rare diamonds in beautiful hues, as they are not just one-of-a-kind wearable pieces but also prove as worthy investments. The demographic who like to invest in these colour diamonds as an asset class, especially pink, has only broadened over the years.

the pink fever
Australia’s Argyle mine, which has produced over 90 per cent of the world’s most coveted pink diamonds for the last 35 years closed its operations in October. The mine that produced over 10,000 polished carats annually has run dry and hence, prices for fancy colour diamonds, especially those in pink are expected to sky-rocket. Named after Lake Argyle, the mine has produced over 865 million carts of rough in the most exceptional colours in the last four decades – and the diamonds from this mine became more sought after because of how pure, strong and intensely hued they were. “Argyle is the best -- in any colour, purple or blue there has been an increase in prices – values have nearly doubled,” adds Shah.

We’ve found sustained interest in coloured diamonds demonstrating that even during these unprecedented circumstances, clients continue to look for rare stones. Buying diamonds at auction has significant advantages as we offer a large selection of important and rare diamonds, coloured diamonds and diamond jewellery at competitive estimates, often from private collections with interesting provenances and histories Daphne lingon, Head of Jewellery, Christie’s, AmericasWith Argyle having come to a close, jewellers are looking at other sources for such exceptional diamonds. Russia’s ALROSA has also produced some exceptional colour diamonds in the recent past, one of which includes the 14.83 carats Spirit of Rose the largest vivid purple-pink diamond to appear at auction, which is expected to go under the hammer anywhere between $23-38m. However, whether or not such mines will produce diamonds with the same potency in colour as the Argyle mine remains a question. The marketing efforts by Rio Tinto, to promote these beautiful diamonds has also been commendable, that collectors from all over the world, look forward to their by invite-only tender. These sealed bids are held for 100 collectors.

Arnaud Soirat, Rio Tinto’s chief executive of Copper & Diamonds said “Fifty years ago there were very few people who believed there were diamonds in Australia – even fewer could have foreseen how the Argyle story would unfold. To arrive at this final chapter has required vision, courage and determination to overcome significant challenges to enter new territory in diamond exploration, mining and marketing. “Today Argyle’s influence stretches into many spheres and over many continents and I am very proud to acknowledge all those people who have contributed to the discovery and development of the mine and the production of some of the finest diamonds the world has ever seen.” There are no other consistent sources for pink diamonds anywhere else in the world, and even if such a source has been discovered, it would take nearly 10 years for the mine to start operating.

a rise in appetite
Over the years we have seen celebrities dazzle on red carpets with gorgeous fancy colour diamond jewellery. From Kate Winslet to Blake Lively and Jennifer Lopez many celebrities have endorsed fancy colour diamonds, making it even more popular. Rio Tinto also has a partnership with select ateliers across the world, to which it supplies some of its rarest fancy colour diamonds. British jeweller Boodles, one of Argyle’s select Atelier has been consistently launching collections redolent with beautiful fancy colour diamonds after witnessing a spike in demand in the last few years. “Pink diamonds are always in demand, particularly in Asia, however, yellows are popular in the USA and brown diamonds more so in Europe,” adds Thompson. Many spectacular colour diamonds like Empress Rose, Golden Empress, Wittelsbach and more have passed the hands of gemstone connoisseur and jeweller Laurence Graff. High jewellery houses like Tiffany & Co., Cartier and Bulgari have also used fancy colour diamonds in their collections.

The concerted marketing effort by auction houses, especially in the time of pandemic has also made these stones more sought after amidst collectors. “During this period, we have rapidly innovated, allowing our clients more ways than ever to successfully transact at Christie’s in our international jewellery sales. Our teams have been exceptional in transitioning to digital and many of our established clients as well as new buyers have purchased sight-unseen. We are proud to say that Christie’s Jewellery Department has been the market leader for 26 consecutive years. Our commitment to excellence combined with our strong personal relationships has built our reputation, which in turn has created trust; the most important factor for clients when buying online. Technology has also played a large part as photo quality has risen and capabilities such as a 3D-view or video have enhanced how objects can be viewed virtually,” says Lingon.

The main reason for a spike in demand for coloured diamonds is as a result of the wellpublicized closure of the Argyle mine in Australia. Not only does the Argyle mine produce 95% of the world’s pink diamonds, it also produces a large amount of fancy coloured brown and yellow diamonds. Should this supply dry up by next year, which we expect it to, demand should continue to rise, therefore increasing prices further Graeme thompson, Worldwide Head of Jewellery, PhillipsCollectors have had more time to think and reflect on what kind of jewellery they want to invest in. “The year has progressed, we have seen increased demand for coloured diamonds, so we made a concerted effort to include a fantastic collection of fancy coloured diamonds in our November sale,” said Thompson. The fact that people have been restricted from travelling and investing in other types of luxury that may not promise any returns have driven more seekers of luxury towards fancy colour diamonds. “The world’s elite and diamond aficionados have had a lot of time to browse through rare coloured diamonds and they haven’t spent too much on other types of luxuries. Auctions of coloured diamonds have been quite interesting. Coloured diamonds are sort of a celebrity when it comes to auctions especially with pinks and blues. Each polished stone is beyond a work of art, the allure and perpetual value associated makes fancy coloured diamonds unparalleled,” says Maheshwari.

Who, what, where?
Collectors of such fancy colour diamonds are mostly seen in Australia, U.S., Asian countries like Hong Kong, China and Singapore as well as parts of Europe. “Demand from the U.S. is constant. Chinese markets have shutdown, however, we cater to the Chinese market as demand is high. We have reasonable demand from all over, Singapore, Hong Kong and Europe. In India, currently demand for yellow diamonds is high. Indian retailers aren’t confident of demand so they don’t want to invest for a single pair of earrings etc. But few years down the line as they will realise that there is demand in Indian market for coloured diamonds – local demand too will increase,” adds Shah. India, especially in the South is more about clarity when it comes to diamonds and this mindset has been ingrained in their psyche. “In India, people have been buying jewellery as a tradition. Indian customers are attuned with their diamonds, precious and other semi-precious stones, but only a few understand the rarity, uniqueness and finite nature of such diamonds. Education and awareness leads to confidence in the consumers, which is lacking in India. The potential is there, and there will come a time where India will become a major market for coloured diamonds,” adds Maheshwari.