Investments in Colored Diamonds on the Rise

“The Pink Dream” is the largest internally flawless diamond the Gemological Institute of America has ever graded.  “The Orange” sold for 35.5 million. With 14.82 carats,  it is the largest fancy vivid orange diamond in the world.” Clearly colored diamonds have become increasingly popular as of late and indicates the direction of the rare diamond market. Stones like these are always purchased with an investment element present. Early last month, Sotheby’s, one of the world’s largest brokers of fine and decorative art, jewelry, real estate, and collectibles, sold a 118.28-carat oval brilliant-cut diamond billed as the “Greatest white diamond ever to appear at auction” for $30.6 million and a brilliant-cut diamond weighing 20.05 carats for $4.06 million. Large diamonds have had good ROI in recent years. Experts are seeing colored diamonds climbing up in value due to the demand being high and the supply slowly decreasing. So much so that the Rio Tinto Argyle mine is expected to close in about 7 years. This particular mine produces more than 90% of natural pink diamonds.

Price records have recently been broken with the Argle Phoenix, a 1.56 carat red diamond going for a little over 1 million per carat. The prices for diamonds are on the rise with diamonds less than three carats increasing about 8%, three carat diamonds increasing 77% and four-carat by more than 140%. since 2004. The Singapore Diamond Investment Exchange, which markets diamond funds, has seen its volume grow from $1.5 million last year to $20 million.

“We are confident to double this amount in 2014,” said Alain Vandenborre, chairman and founder of the exchange, which recently changed its name from the Singapore Diamond Exchange to avoid confusion with traditional diamond exchanges, where the stones are bought and sold by merchants and jewelers.