The popularity and price of fancy colored diamonds have been on the rise globally, driven by Asian investors.
From 2006 to 2014, fancy colored diamonds (pink, yellow, and blue diamonds) experienced an average total appreciation of 154.7%, according to the Fancy Color Research Foundation (FCRF), a non-profit colored diamond index that was established last year. In the same time period, the colorless, white diamond increased by 62.4%, according to the Diamond Prices Index.
China and Hong Kong now represent approximately 40% of sales of the fancy colored diamond market, according to FCRF. “Most increases in fancy colored diamond prices, particularly for pink diamonds, is driven by Asian customers,” says Tracey Greenstein, director of research at FCRF.
The high demand and extreme rarity of the colored diamond are what keep pushing up its price: It’s formed when a non-carbon element—such as nitrogen and hydrogen— is accidentally trapped during the crystallization process of the diamond. The foreign element is what renders the diamond colorful.
Outside of Asia, colored diamonds are often considered assets with highly attractive investment potential whereas colorless diamonds are more suitable for gifting. But in Asia, they are seen as both.
Edward Alvarado, director of colored diamond dealer, Diamintel notes that he often sees Chinese couples coming to his office looking for a colored diamond ring “for her” but walk out with “her ring and his ring.”
“A lot of men liked colored diamonds in China,” says Alvarado. “With white diamonds they might think it looks girly or flashy but with colored diamonds, they can choose some of the more masculine colors.”
As a Venezuelan company that supplies clients globally, Diamintel now sees 80% of their revenue coming from Greater China. Three years ago, Europe and the United States took up 50% of their total revenue.
Major auction houses have been bringing some of the most valuable natural color diamonds to market through the Hong Kong sales, whereas Geneva and New York were the two main focal points before, according to the Natural Color Diamond Association (NCDIA).
Sotheby’s Hong Kong sold an 8.41-carat purple-pink diamond for a record $17.77 million U.S. dollars in last year’s Magnificent Jewels and Jadeite Autumn Sale. Just two months ago, a 13.88-carat yellow diamond ring and a pair of 6.30 and 6.15-carat diamond earrings sold for $466,667 and $312,821 U.S. dollar, respectively, in Hong Kong.
And the colored diamond phenomenon is not exclusive to Asia’s super rich. Many of the private buyers at the Hong Kong wholesale jewelry trade shows are part of the growing middle class nowadays.
“We live in a time of a democratisation of the diamond market,” says Diamintel’s Alvarado. “The market is getting a lot more educated and global- and it’s not just the traditional elites that are collecting but the savvy Asian investors as well.”