While the diamond industry has been busy watching the steady increase in rough diamond prices over the past 18 months, after the slump in demand that followed the global financial crisis, diamond prices in a different arena have shown an even more impressive rise, Antwerp Facets says. Sales in the showrooms of the international auction houses, particularly those of Christie’s and Sotheby’s, have indicated that the demand for prestigious diamond jewellery is exceptionally high and that buyers are willing to break records in order to land the items.
The latest record-breaking sale came when British jewellery dealer Laurence Graff paid 45.4 million Swiss francs ($45.6 million) for a 24.78-carat emerald-cut graded Fancy Intense Pink diamond by the Gemological Institute of America at a Sotheby’s auction in Geneva. Graff’s telephone bid comfortably broke the presale estimate of 27 million francs to 38 million francs, as has been the case with most of the items sold at jewellery auctions in the past year-and-a-half.
Even for Graff, who has reportedly sold diamonds to kings and queens, as well as super wealthy celebrities and has vast experience in dealing in diamonds, the pink diamond was superior to any other diamond he had ever seen. “It is the most fabulous diamond I’ve seen in my career,” he said as he named the gem the “Graff Pink.”
For Graff, it was the second time that he had set an auction record. In December 2008, Graff paid $24.3 million for the 35.56-carat grayish-blue “Wittelsbach Diamond” at a Christie’s auction in London which was then the highest price ever paid for a gem sold at auction.
Sotheby’s reported that the jewellery auction led to a record 103 million francs ($103.3 million) of sales, and confirmed that a continuing demand for rare gems was behind the prices being paid.
Meanwhile, at the Christie’s Jewels: The Hong Kong Sale, a rare 14.23-carat fancy intense pink diamond, known as The Perfect Pink, sold for $23.2 million making it the most expensive jewel ever sold in Asia. In addition, at $78.9 million, the sale raised the highest total ever for a jewellery auction in Asia and the largest ever at Christie's worldwide. The Perfect Pink easily swept past its presale estimate of $14 million-$19 million.
Christie’s said that in 244 years of auction sales, only 18 diamonds of more than 10 carats showing a distinct pure pink colour have being offered for sale and not one was graded a fancy intense pink at the time. Larger stones rarely come up for auction and their scarcity made the sale of the diamond a distinctly unusual event. While most pink diamonds exhibit a colour modifier such as purple, orange or grey, the stone showed no trace of a secondary colour, making it exceedingly rare, both commercially and naturally.
“Whether it’s jewelry or art or wine, the Asian market is one of the most important,” Rahul Kadakia head of jewelry at Christie’s America, said after the sale. “The question is how much bigger will it become? Every season takes it up a notch.”
Christie’s also staged a successful auction at its Jewels: The November New York Sale which raised $55.5 million with a very high sales rate of 90 percent by lot, and 95 percent by value. The outstanding items was The Bulgari Blue, a two-stone ring featuring a rare fancy vivid blue diamond weighing 10.95 carats, which sold at the end of the 450-lot sale for $15,762,500, or $1.4 million per carat – setting a new world record price per carat for a blue diamond at auction.
As with the Graff Pink, which had not been sold on the open market for 60 years, similarly it was the first time in almost 40 years that the Bulgari Blue had come up for sale at Christie’s. Inevitably, the long periods of time that such diamonds are not available for sale add to their cachet – and their sales price.
Speaking of the Bulgari Blue, Kadakia said it had been bought at the Bulgari boutique in Rome in 1972 for just $1 million, which is the equivalent of about $5 million today. "With a sold price of $15.7 million, the stone tripled its value in that time, demonstrating the incredible resilience of diamonds in today’s volatile economic environment and the true, lasting, value of fine jewelry."
After the Bulgari Blue, the next highest-selling item was a rectangular-cut D color, potentially flawless diamond ring of 17.65 carats by Harry Winston which sold for $2,154,500, or $122,000 per carat. Meanwhile, a pear-shaped D color, VS1 diamond ring of 17.86 carats by Harry Winston sold for $1,818,500, or $102,000 per carat.
Following those two jewellery pieces came a pear-shaped D color, IF diamond of 12.32 carats which sold for $1,314,500, or $107,000 per carat. Meanwhile, a rectangular-cut D color, potentially flawless diamond ring of 12.21 carats by British jeweller Laurence Graff sold for $1,258,500, or $103,000 per carat.
At Christie's Geneva Jewels Sale last December, the auction house raised $40.4 million and reported that it was 73 percent sold by lot, with the highlight being an antique 26.17-carat pear-shaped D, internally flawless, type IIa Golconda diamond that sold for $3.5 million or $133,000 per carat to a private buyer. “As always, the best quality jewels were keenly competed for and diamond prices maintained healthy levels as seen at sales worldwide," said Jean-Marc Lunel, head of Christie's Geneva jewellery department.
Both Christie’s and Sotheby’s have pointed out that such high-end diamonds are increasingly being bought by Asian buyers, which, in turn, is leading to the holding of more sales in the Far East. Instead of staging such auctions exclusively in New York or Geneva, they are also holding them in Hong Kong, the gateway to the Asian market, and particularly to the increasingly wealthy Chinese market.
Such a move reflects the shift in wealth from West to East, as Asia’s economic growth rises at a fast pace while the West suffers from a sluggish emergence from the global financial slowdown. That is emphasised, say the auction houses, by increasing purchases of luxury products by Asian buyers both in Hong Kong and abroad, and not just of high-end jewellery and gems, but also fine wines and works of art.
China's economy was the first to emerge from last year's global recession, and this year the country surpassed Japan to become the world's second-largest economy. In addition, the refusal of the country’s leadership to devalue the currency, the renmibi, against the dollar means items are less expensive when paid in the international currency.
Kevin Ching, chief executive of Sotheby's Asia, said: “All I can say is that back in 2004-2005, mainland Chinese participation accounted for only 5-6 percent of the Asian auction business in Hong Kong. Now, I would say mainland Chinese would account for 50 percent, easily, of all Asian auction business, including watches, jewellery, wine and art.”
