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Flight of Fancy: Colored Diamonds

Colored, or “fancy,” diamonds have gone from being a curiosity to being the ultimate prize among gems.

Flawless fancy vivid blue diamond from the Cullinan Mine in South Africa.

Flawless fancy vivid blue diamond from the Cullinan Mine in South Africa.

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Diamonds are common. Shockingly common, in fact. According to the new book Stoned: Jewelry, Obsession, and How Desire Shapes the World (Ecco, $27.99), enough diamonds have been mined since 1870 to provide everyone on earth with a one-half-carat diamond ring and still have an extra billion carats to spare. But occasionally, miners discover that a weird and wonderful accident happened millions of years ago deep within the earth—the diamonds were exposed to radiation, or some of their carbon was replaced with boron, or they endured just the right amount of stress, and they acquired a color. Most of the time, naturally colored diamonds are yellow or brown, but every now and again they assume a scarcer hue: pink, blue, orange, purple, green, red, or something else in between.

The Gemological Institute of America (GIA) calls diamonds that display rare and unusual colors “fancy.” Fancy diamonds with the qualities that earn the GIA modifiers “deep,” “intense,” or “vivid” and also weigh more than a carat are even fewer in number. So when a good-sized fancy stone that sports the right stuff appears at auction, bidders vie to empty their wallets. The Knight Frank Luxury Investment Index shows that between January 2005 and the fourth quarter of 2014, the value of colored diamonds rose 167 percent. It did so on the strength of a parade of headline-grabbing auctions.

As good a place to start as any is Christie’s London sale of the Wittelsbach diamond, a 35.56-carat fancy deep greyish-blue, in December 2008. English jeweler Laurence Graff placed the winning bid of £16.3 million ($24.3 million) and redubbed it the Wittelsbach-Graff. In May 2009, Sotheby’s Geneva offered the Star of Josephine, a 7.03-carat fancy vivid blue diamond for CHF 10.5 million ($9.4 million), setting a then-record for the highest price paid per carat for any gemstone at auction. Graff struck again in November 2010 at Sotheby’s Geneva, setting a new auction record for any jewel by paying CHF 45.5 million ($45.6 million) for a 24.78-carat fancy intense pink that he christened the Graff Pink. Two other high-profile Christie’s sales that year—a 14.23-carat fancy intense pink that fetched HK $179.9 million ($23.1 million) in Hong Kong and a two-stone ring containing a 10.95-carat fancy vivid blue that sold for $15.7 million in New York—led the auction house to proclaim 2010 the year of the colored diamond.

But more jaw-dropping sales would follow. In April 2013, Christie’s offered the Princie Diamond, a 34.65-carat fancy intense pink Golconda, in New York for $39.3 million, a sum sufficient to earn the titles of the most expensive Golconda diamond at auction, the most expensive diamond sold in the U.S., and the most expensive diamond in Christie’s history. In November 2013, the largest fancy vivid orange diamond yet known appeared at Christie’s Geneva. Weighing in at 14.82 carats and simply called The Orange, it reaped CHF $32.6 million ($35.5 million). November 2014 saw Sotheby’s New York present the Zoe Diamond, a fancy vivid blue that soared to $32.6 million and claimed a trio of auction records—top price for any blue diamond at auction, a price-per-carat record for any gemstone, and the first stone to sell for more than $3 million per carat. In the same month, Christie’s Hong Kong auctioned a 2.09-carat fancy red diamond—not only is red the rarest hue among the colored diamonds, fancy red diamonds are virtually never seen in weights above one carat. It fetched HK $39 million ($5.1 million) and set world auction records for a red diamond and the price-per-carat for a red diamond.

Then came November 2015. On the 10th, Christie’s Geneva sold a 16.08-carat fancy vivid pink diamond for CHF $28.7 million ($28.6 million). The next day, Sotheby’s Geneva offered the Blue Moon diamond, a 12.03-carat fancy vivid blue (see page 96 of this issue). It fetched CHF $48.6 million ($48.4 million), seizing world auction records for any gemstone and for the highest price per carat of any gemstone. It also became the first stone to sell for more than $4 million per carat.

If you’re dazzled by this avalanche of facts, you’re not alone. But don’t form the impression that great colored diamonds are somehow more abundant than they once were. “Record-breaking stones appearing at auction doesn’t mean they’re more plentiful,” says Emily Barber, a jewelry specialist at Bonhams. “People are appreciating how special they are. They’re capturing the imaginations of collectors and investors.”

But why are these record auction prices happening now? Colored diamonds have been cherished throughout history. The Hope diamond is more famous for its alleged curse than for its navy-blue hue, but it remains one of the biggest draws of the Smithsonian museums. Look at any collection of crown jewels and you’re bound to find an impressive colored diamond—France’s contains the Hortensia Diamond, which is peachy in both senses of the word; Iran’s has two pink diamonds, including the largest pink diamond in the world, the 182-carat Daria-i-Noor; and the Green Vault of Dresden, Germany, gains its name from the magnificent 41-carat Dresden Green. Only in the 21st century did colored diamonds push white diamonds out of the spotlight and seize it for themselves.

“Before the last 30 years, colored diamonds were [seen] more as curiosities,” says David Bennett, worldwide chairman of jewelry for Sotheby’s. “Only recently have they been valued just as they are.” The shift in attitude can be seen in the designs of vintage and contemporary jewelry. “Today, when there’s a colored diamond in a piece, it’s the central feature. It’s about celebrating the beauty of the stone,” says Greg Kwiat, CEO of Fred Leighton, the legendary dealer of vintage and estate jewelry, and also CFO of his family’s 109-year-old namesake jewelry business. He adds that before 1980, colored diamonds “would still have been part of the piece, but they might have been part of a greater design. And they were maybe used a bit more whimsically in the past.”

The series of stunning auction results deserve much of the credit for the higher public profile of colored diamonds, but other factors played a role. Several experts cite a much earlier auction—a 1988 sale of a .95 carat red diamond for $880,000 at Christie’s New York—as pivotal. “When it sold for almost $1 million a carat, it created a stir,” says John King, chief quality officer for the GIA. “[The stir] started to build within the industry, and it spilled into greater awareness among consumers.” King also credits the effect of cutting techniques that arrived in the late 1970s and early 1980s. “[The newer cuts] tend to collect and intensify the color,” he says.

Pop-culture events helped, too. When Ben Affleck proposed to Jennifer Lopez in 2002 with a six-carat pink diamond ring custom-designed by Harry Winston, it introduced countless people to the fact that diamonds come in colors other than white. “It was huge,” says Tom Burstein, senior specialist and head of private sales for jewelry in the Americas at Christie’s. “I was at Harry Winston at the time. It was then called the J. Lo pink. It drew great, great interest, for sure, and it had a tangible effect. People called in wanting to acquire a pink diamond of some size.”

The most powerful factor of all is the surge in demand from collectors seeking solid investment options. “Colored diamonds are perceived as a relatively safe asset class in which to put money,” says Barber. “White diamonds are soft at the moment, but colored diamonds continue to grow, and 2015 was a record year for colored diamonds. It’s not plateauing or decreasing. It’s increasing.” Burstein concurs: “The demand base is much broader, much more global.”

But the qualities that make colored diamonds sublime can also make them frustrating to acquire. “Even with the means, it’s tough to get anything exact,” says Scott West, executive vice president of LJ West Diamonds, which specializes in colored diamonds. “If you want a five-carat fancy vivid blue diamond, you may have to wait. It could be years. And when the stone does come out, there’s not just one customer, there’s a few customers that want it. When you have people capable of paying more, it’s a question of do you want to wait a few years for something similar, if it ever does come, or do you pay five or 10 percent more?”

Also confounding is the gulf between words and life. Two colored diamonds that have near-identical descriptions on paper can seem radically different when you hold them in your hands and really look at them. “When you talk about pink and blue diamonds of size and importance, it’s tough to talk about them as a group. They’re all individuals,” says Bennett. “To me, each stone has a personality. They are as different as people are different.” The distinctive personalities of large fancy colored diamonds ensure that every auction is a one-time event: there is no other stone quite like it, and there won’t be one again until it finds its way back to the market. “You don’t wear a GIA report on your finger. You have to look at the stone,” Burstein says. “If this color pleases you, I could show you three others of the same grade and you won’t like them.”

For all these reasons, top colored diamonds are likely to continue to make and break auction records for years to come. “The thing is, white diamonds are not really worth what everyone’s been told they’re worth. They don’t have the rarity that’s been claimed for decades. Colored diamonds actually do,” says Aja Raden, author of Stoned. “They are what white diamonds were advertised to be. They are rare, and they do hold their value. I think they are headed toward being in the 21st century what white diamonds were in the 20th—the icon of privilege and glamour.”

“Nothing interacts with light like a diamond. That’s what makes them so prized,” says Burstein. “When you add color on top of it? Forget about it, it’s over.”

By Sheila Gibson Stoodley

Author: Art & Antiques Magazine | Publish Date: January 2016

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