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DIAMONDS AT AUCTION

The 12.11 carat fancy intense blue diamond that sold at Christie’s for $15.8 million. (Photo courtesy of Christie’s)

The 12.11 carat fancy intense blue diamond that sold at Christie’s for $15.8 million. (Photo courtesy of Christie’s)

HIGH-END DIAMOND MARKET SURGES DURING COVID PERIOD, PARTICULARLY AT MAJOR AUCTION HOUSES

 
The COVID-19 pandemic, which while causing economic havoc over much the world during the past six months, has also had the opposite effect in various sectors, such as the housing market in number of countries, driven in part by families looking to get out of the larger city centers where lockdowns can be oppressive, and into the relative comfort of the suburbs. Another sector that has seen an uptick is high-end diamond jewelry sales, more specifically at auctions. “Trading at the high end of the diamond market is comparable to the high end of the real estate market where prime locations retain their value irrespective of broader market conditions including scarcity of properties and desirability,” says Paul Redmayne, Head of Private Sales, Jewellery at Phillips, as quoted by the Natural Diamond Council, in an extensive article on the subject published on its website, authored by Jill Newman. “[And] from a buyer’s perspective, auctions—the neutral intermediary between global buyers and sellers—are the truest indication of market price.” Redmayne continued, emphasizing that diamond sales at auction offer a transparent view of the value of stones, and the type of stones that are in demand. “Diamonds at this level are considered a free-standing asset class,” Redmayne said.  And having seen the appreciation in such stones over the past 15 years, diamond funds, private individuals and family offices have branched out to include them in their portfolios.” In Redmayne’s opinion, people are increasingly turning to invest in alternative assets like diamonds alongside their “traditional” portfolio.

CHRISTIE’S RISK PAYS OFF BIG TIME

Christie’s was among the first of the auction houses to realize the trend, when it offered an exceptional 28.86 carat D-color diamond for sale online in June. With a presale estimate between $1 million and $2million, it was the most expensive jewel that the auction house had ever presented via the Internet.

The risk paid off: there were 31 bids from buyers around the world and it sold—sight unseen—for $2.1 million, a world record price for a jewel sold online.

But that was was one of several multimillion-dollar diamond transactions at Christie’s during the first six months of 2020. In Geneva in July, a twin stone Reza ring with a 5.34 carat fancy blue diamond and a 5.37 carat, D-colorless diamond sold for $9.2 million, and at the same sale, a 100.85-carat, D-color, internally flawless diamond sold for $5.9 million.

Meanwhile in New York, a diamond necklace including a pear-shaped 116 carat F-color diamond sold for $6.3 million.

A two-stone Reza ring, featuring a 5.34 carat D-color diamond and a 5.37 carat fancy vivid blue diamond, which sold for $9.2 million at Christie’s. (Photo courtesy of Christie’s)

The diamond necklace, which had a pear-shaped 116 carat F-color diamond as its center stone, which sold in New York at Christie’s for $6.3 million. (Photo courtesy of Christie’s)

The diamond necklace, which had a pear-shaped 116 carat F-color diamond as its center stone, which sold in New York at Christie’s for .3 million. (Photo courtesy of Christie’s)

PORTABLE FORM OF WEALTH DURING A CRISIS

The most important sale of the season was at Christie’s Hong Kong in July, when a 12.11 carat internally flawless fancy intense blue diamond sold for $15.9 million, far beyond its $8 million to $12 million presale estimate.

“It sold after 15 minutes of active bidding,” recalled Rahul Kadakia, Christie’s International Head of Jewelry. “This exceptionally rare diamond was originally purchased in the 1980s and hadn’t been on the market before. The seller knew he had a treasure.”

The pandemic and the uncertainty associated with has been a factor in the strong auction market, suggested Kadakia. “Diamonds are the most portable form of wealth, and that has always been true. You cannot take a painting with you and you can’t move a building; a diamond is the only way you can move $100 million in your pocket.”

“It’s a good moment to make smart purchases and put the stones away until we can wear them,” Kadakia added.

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