Investors: High-End Diamonds Are A Go

The solid prices achieved at Christie’s auction on Wednesday are proof that investment in high-end diamonds is going strong – exceptional diamonds become available at a slow pace, sellers find buyers and buyers are paying top dollar for these rare and beautiful diamonds.

Auction results are a good indicator of the going prices of these types of diamonds, although the majority of the trade in high-end goods is conducted privately and not publicly through auction houses. One of the three diamonds of interest at Wednesday’s auction in New York City was a 3.81-carat Fancy Vivid Blue, VS1 diamond that sold for $3.973 million.

A trader who specializes in this type of goods priced this diamond at $1 million per carat, which is very near what was actually paid - $1.043 million. Very few Fancy Vivid Blue diamonds have sold for more at auctions in the past 10 years, and all of them were bigger and had better clarities.

An 8.77-carat Fancy Intense Pink that sold for $6.325 million was an excellent purchase for its buyer. At $721,000 p/c, it is a little below the $750,000 p/c price our expert quoted and in the upper range of the pre-sale estimate.

The star performer at the auction was a rectangular-cut, 25.30 carats, D/VVS1 diamond bought for $3.133 million. In very large white diamonds, that is stones that weigh more than 10 carats, it is D/IF diamonds that achieve the best prices because they are the most sought-after white diamonds.

Early estimates priced this diamond at $100,000 p/c, a price per carat that many large diamonds of this color and clarity are selling for these days. The hammer price, which translates to $124,000 p/c, is therefore an exceptionally good one.

Compared to the first two diamonds and their prices – both total and per carat – the price of this white diamond may seem low. Far from it, the blue diamond is exceptionally rare, with only three or four Fancy Vivid Blues offered at auction annually. Pinks, while more common, are typically much smaller than 8 carats, so the combination of deep color and large size make it unique as well. The selling prices of the blue and the pink were good solid prices, but not far off the expected price in the market.

The white diamond, getting 24 percent more than expected, is the big surprise. Less rare than pinks and blues, as well as less pricy, means that (relatively speaking) more investors can buy them. With the high price publicly known, it will likely push up prices of large white diamonds currently offered in the market. From an investor’s perspective, this is good news: the market is active, buyers snap-up goods, and prices are rising.

Once again, we see the vitality and vigor in high-end diamonds, almost regardless of macro-economic situation. The ability to sell such a diamond quickly, and with a good appreciation, proves that investment in high-end diamonds can be a viable asset-class.

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