What Have We Learned From The Past Of Colored Diamond Investments

In this article we will briefly be looking at the evolution of auction prices for 3 main colored diamond categories. While this might not unlock the mysteries of the market’s evolution, it will help us see how supply and demand have affected the most popular diamond categories at auction in the last decade (or two!)

Fancy Intense Pink Diamonds

The appreciation of Fancy Intense Pink diamonds over the past 10 years is truly astonishing. Even with regards to the smaller more “affordable” investment grade diamonds of the category ranging from 1-2 carats, the exponential rise in value is mind boggling.

Let’s look at an example shall we?

In November of 2007, a 1.23 carat Fancy Intense Purplish Pink diamond was sold at auction for a little over $104,000 per carat. Fast forward 10 years, in October of 2017, a 1.99 carat Fancy Intense Purple Pink diamond fetched a commendable $338,000 per carat.

This essentially translates to a 3x increase in value in just one decade. Now, surely this will not apply to every single diamond in the category, the 4Cs are still the main contenders, but the laws of rarity and demand will always apply.

Bonus: 2 decades ago during April of 1997, a 1.33 carat Fancy Intense Pink was sold for approximately $51,000 per carat, half of what this category achieved in 2007 and a sixth of what these diamonds sell for today.

 Fancy Intense Blue Diamonds

If we wanted to take it up a notch in terms of investment grade diamonds, the next best category to look at would be Fancy Intense Blue diamonds ranging from 3-5 carats. The liquidity of such assets would probably fall lower than the Fancy Intense Pinks mentioned previously.

This is mainly due to the higher price cap, making it harder for a potential market to exist, but it is not impossible. The higher the quality of the gem, the more potential buyers there will be to demand it.

So what did the price per carat look like for this diamond category 10 years ago?

In May of 2007, a 3.04 carat Fancy Intense Blue diamond was sold at auction for slightly over $241,000 per carat. 10 years later, a 3.37 carat Fancy Intense Blue Diamond sold for approximately $829,000 per carat. Once again, almost 4x increase in value in just 10 years.

Bonus:  2 decades ago during April of 1998, a 3.04 carat Fancy Intense Blue diamond was sold for a little over $120,000 per carat. Again, less than half of what the value for the category in 2007, and a seventh of what similar diamonds are fetching today.

 Fancy Vivid Blue Diamonds

The last category we will be looking at belongs to the elite fancy color diamonds whose combination of saturation and size constitutes immense rarity.

So how has the price per carat value changed in the last 10 years for Fancy Vivid Blues?

In November of 2007, a 4.16 carat Fancy Vivid Blue diamond was sold for $1.14 million per carat. While this is remarkable on its own, a decade later, a 3.98 carat Fancy Vivid Blue diamond was sold for an astounding $2.23 million per carat, translating to a 2x appreciation in value.

Bonus: The earliest recording of a Fancy Vivid Blue diamond sale for the 3-5 carat range dates back to 2001. At that time, a 4.50 carat Fancy Vivid Blue Diamond fetched a little over $297,000 per carat; less than a fourth of the category’s value in 2007 and about an eighth of its value today!

So What Will The Future Hold?

Will the exponential increase in value be mimicked in the next decades? In all honesty, no one knows for certain, but we can speculate…

The above points were made in order to validate what we already know; that the demand for fancy colored diamonds is increasing at a far greater pace than their supply. In fact, there is not a consistent supply of these stones, especially in terms of the Pink color category.

The Argyle mine, which produces 90% of the world’s pink stones, will be closing in the very near future. This means that the only pink diamonds that will be up for sale are those belonging to the remaining 10% of producers, and those that already exist in the hands of investors seeking liquidity.

While the same cannot be said about the blue category, the rarity of these stones is immense as well; all the while demand is only getting stronger.

So while many investors are turning to other alternative tangible assets such as art, classic cars, antique furniture, and wine; fancy colored diamond prices will not be hindered, and could be expected to continue to soar in the years to come.

What do you think the future of fancy colored diamond will look like? Do you have any questions? Let us know and as always feel free to follow us on Twitter and like us on Facebook.

For more colored diamonds insight, check out the posts below:

• Should I Invest In Loose Or Set Colored Diamonds
• Red Diamonds: An Alternative Investment Windfall
• Investing In Natural Pink Diamonds: What You Need To Know
• Colored Diamonds Growing As An Alternative Investment