Fancy Colored Diamonds: A Lustrous History
The First Diamond
Diamonds are forever – this has been a mantra heard nearly from the discovery of the gem itself. And it is true! While in ancient times the focus was on the stones were used to thank the gods and decorate rulers and royalty, diamonds have come to represent sophistication, strength, glamour, love, and wealth. Today they are valued as fine jewels, for their use in industry – and more recently as investments.
The word diamond itself finds its roots in the ancient Greek word adámas, meaning unbreakable. True enough, the diamond is a remarkably durable gem, widely known to be the hardest natural substance on earth. Diamonds are extraordinary because they are one the earth's most beautiful and durable resources.
Research shows that diamonds were discovered around 2500BC, and were soon used for their strength and beauty. In ancient Egypt, diamonds were placed in the middle of the loop of the ankh, which symbolized life itself. In the Far East, Indians, who were the first to mine the gems in the rich deposits of the Krishna, Penner, and Godavari Rivers, endowed the stones with holy powers and decorated their gods with the colored gems. Greeks and Romans believed the diamonds to be tears of the gods and splinters from falling stars and thus coveted them greatly as both religious pieces and collectibles.
All throughout history, diamonds have inspired legends and myths, tales of greatness and ingenuity. Alexander the Great was said to have discovered the Valley of Diamonds in India, which was guarded by thousands of fearsome snakes. To reach the diamonds that he desired, legend has it that the ruler used mirrors to frighten the snakes away with their own reflection; once gone, he reached the stones he sought.
Diamonds have remained treasured, with availability boosted by commercial mining, processing, and marketing. Today, diamonds are accessible to rulers and every man.
The commercial mining of diamonds as we know it began in South Africa in the late 19th century. Political strife and conflicts between local warlords affected accessibility and caused certain areas to be more difficult to mine. Today, the majority of stable rough diamonds come from Russia, Botswana, Angola, the Democratic Republic of the Congo, Namibia, Canada, and Australia. Rarer colored diamonds are also mined across the globe, with the most famous stones, the pink argyle diamonds, found in Australia. They are considered by many to be the most precious diamonds on earth.
To give an idea of just how scarce colored diamonds are, for every one carat of colored diamond that is mined, 10,000 carats of clear diamonds are mined elsewhere.
A Colorful Spectrum
Rare colored diamonds, or fancy colored diamonds as they are frequently known, represent some of the most precious diamonds available to man. The incidence of colored diamonds being formed in nature is very small due to the staggeringly unlikely conditions that have to be met for their formation.
Diamonds get their colors through a variety of natural processes: from chemical impurities and a variety of trace elements, from structural defects developing in the crystal lattice, and from exposure to radiation. The end results are colorful indeed, with blue, yellow, orange, red, green, pink, purple, brown, and even black diamonds found in mines around the world. Of all these hues, red diamonds are considered the rarest.
With the advent of high-tech industries and an ever rising demand for precious gems, some companies have begun the synthesizing of colored diamonds for commercial use. Diamond crystals are produced in large presses under high pressure and high temperature, simulating the natural environment where colored diamonds are normally formed. A carbon material is fed into the device and the appropriate catalysts are applied to speed up the formation process. Other methods are also used to produce a specific diamond color, including exposing diamonds to radiation to change the position of the atoms and hence the color.
Colored diamonds appeal to a large percentage of the jewel buying market because the diamonds can be enjoyed on their own, as a centerpiece stone, or as part of a mixed color or mixed stone ring or bracelet. While in ancient times colored diamonds served as offerings for the gods, today we see more of these gems given to fiances and wives than deities. Whether serving as decorations on rulers’ scepters or as the main gemstone in a classic diamond engagement ring of a starlet, these diamonds hold a captivating place in people’s hearts and imaginations that has not changed through the years.
It is important to remember that treated or synthetic diamonds do not carry as high a value as natural rare colored diamonds. Strict standards and certification are used to protect the value of real diamonds. Before buying any non-synthetic gemstone, be sure to inquire about the stone’s certification.
Jewels in our Midst: The Diamond Industry
Diamonds benefit from a sort of cult following in today’s society. Their appeal has pervaded all cultures. Show people anywhere a spectacular diamond, and you are bound to get a reaction.
In the upper strata of society, jewels have always been a prized possession. Commonly associated with celebrities and high fashion, diamonds of all kinds can be seen gracing the appearance of those fortunate enough to afford them. Exemplary pieces are displayed in some of the world’s most prestigious exhibits, in museums and showrooms.
Diamonds and Celebrities
Celebrities and public figures have all played their part in romanticizing diamonds and other precious gems. Marilyn Monroe gave diamonds a little push on the wish lists of women all around the world with her hit song, “Diamonds are a Girl’s Best Friend.” But probably the most iconic of diamond ambassadors is Elizabeth Taylor, who gained worldwide notice and fame for her comprehensive and exotic collection of rare colored diamonds that she assembled throughout her life. While her reasons for collecting may have been purely personal and based on the gems’ physical beauty, it would seem that she got it right from a business standpoint, as well.
While white diamonds still remain popular today, it is the ultra-rare colored stones that have been at the forefront of the fashion scene for the last decade. Cartier, picking up on the trend, released a 2008 collection called Inde Mysterieuse. The collection featured 34 iconic colored diamond pieces, with the smallest being a pair of rose-cut, yellow and brown diamond earrings costing approximately $270,000. This sent the market into a frenzy, and the demand for colored diamonds rose even further.
Since then, there has been a virtual stampede of rare colored diamonds purchases by movie stars, fashion icons, and sports stars. Of course white diamonds have remained popular, as they have traditionally been associated with engagement and commitment, but colored diamonds offer more versatility and a certain sense of individuality.
Some examples of celebrities sporting colored diamonds: Kate Moss bought herself a pink marquise diamond commitment ring to celebrate the birth of daughter Lila Grace; Kobe Bryant bought his wife a $4-million, 8-carat purple diamond apology ring, while Matthew Broderick opted for a yellow gold diamond ring for Sarah Jessica Parker. And who would ever miss out on Carmen Elektra’s stunning black diamond? These examples are only the tip of the iceberg on a list that goes on and on.
Fancy Colored Diamond Market Today
Diamonds have always been seen as a luxury item, to be coveted and treasured, but it is the rare, fancy colored diamonds that continuously stir the most interest – and more importantly – the highest financial returns. Colored diamonds have a strong investment record and remarkable staying power in terms of market value. The past thirty years have seen only an increase in the value of colored diamonds in the market.
The industry for mining and processing colored diamonds is rooted in tradition and constancy. When you own something as precious as a diamond mine, you do not tend to let it go. A prime example of a long standing producer of diamonds is Rio Tinto and their Argyle diamond mine in Kimberly, West Australia – the world’s largest supplier of natural, rare colored diamonds. The mine and processing plant are known to produce brown, champagne, purple, and red diamonds, which are some of the most valuable colored variants on the market. The pride of its collection, however, is the annual diamond auction of pink diamonds, of which they have an almost total monopoly.
At the Argyle Pink Diamond Tender, where the processed gems are sold or auctioned, Rio Tinto sells just one carat of polished pink diamonds out of every 1,000,000 of rough pink diamonds it mines, which has led to a clever manipulation of demand and prices in the company’s favor.
In 2013, prices at the auction were 35% higher than the previous year, and a record was set for a 2.51-carat, fancy deep pink diamond, which sold for $2 million, or almost $1,000,000 per carat. The mine also released a rare blue and violet diamond collection in 2009. The Once in a Blue Moon Collection had been sourced over a number of years and was hugely successful.
No mine lasts forever, though, and unfortunately production at the Argyle mine is set to end by 2020 as the deposits of pink diamonds approach exhaustion. It will mark the end of an era in the production of precious gemstones, but to keen investors and businessmen alike, this will also lead to a huge swell in prices and demand.
The market has already begun to prepare for this gradual cessation of supply. Sotheby’s announced that its 2012 jewelry sales were the highest ever for the company. Among its biggest sales was a rare fancy deep blue 10.48-carat diamond which sold to Laurence Graff for $10.8 million. Sotheby’s and Christie’s 2013 auctions featured a $83.2 million 59.6-carat fancy pink diamond and a 14.82-carat, $35.5 million orange diamond, some of the most expensive sales in the industry to date.
These auctions inspired commentators from the New York Times and Forbes to welcome fancy colored diamonds as the newest and one of the most desirable asset classes for investors. The reasons stated for the new popularity include the rarity of the stones, but more importantly the desire of wealthy investors to diversify their portfolio with tangible assets as a hedge against volatile equity markets.
Investors from emerging economies, particularly Brazil, Russia, India, and China have added to the increased pressure for demand of high quality stones. All around the world exchanges and analysts have noted a significant increase in both demand and prices for precious stones, with the Asian markets based in Singapore and China seeing the highest increases in years.
Global demand for rough diamonds is expected to climb at an annual rate of more than 6% over the next 10 years to 2020.Demand for rare colored diamonds has only risen in the last 10 years. Without any viable alternatives to replace Argyle and the desire and demand for rare colored diamonds growing on a worldwide scale, the industry has become a battleground for investors and collectors alike.
The time has never been better to join in the fun.