"Fancy Color" diamonds continue to enjoy remarkable success.

Recent reports indicate that these gemstones continue to experience rising prices and popularity, demonstrating their strong investment potential.

THE RISE OF COLORED DIAMONDS (Fancy color)

In the context of the iconic Marie-Thérèse pink diamond, which fetched nearly $14 million at Christie's in New York, and the media attention surrounding the marriage of Amazon founder Jeff Bezos to Lauren Sanchez—whose engagement ring features a cushion-cut pink diamond estimated to be between 20 and 30 carats—the Natural Diamond Council (NDC) released a report on fancy colored diamonds in early July.

The report highlights the growing interest in these exceptional stones. With an increasingly limited supply market and diversified demand, the diamond industry could be entering a new era in the fancy color segment.

These diamonds often make headlines, usually accompanied by exorbitant prices. They have become stars of global auctions, their rarity and investment potential making them particularly sought after by collectors, especially in Asia and the Middle East.

MARKET OVERVIEW

According to the NDC report, the estimated wholesale value of fancy colored diamonds expected to enter the market in 2024 exceeds $4.5 billion. The report also cites data from the Fancy Color Research Foundation (FCRF), indicating that prices for these diamonds have increased at a compound annual rate of 5.7% over the past two decades.

“While global trade uncertainties have prompted caution in the luxury sector, the fancy colored diamond market has remained remarkably resilient,” says Roy Safit, CEO of FCRF. “The data reflects a strategic and measured repositioning, demonstrating the market’s increasing maturity and the defensive appeal of vivid colored diamonds.”

Fancy colored diamonds come from a limited number of mines worldwide. The closure of Rio Tinto's Argyle mine in 2020—once the source of over 90% of the world's pink and red diamonds—created a shortage in the market due to a lack of regular supply of pink diamonds. This situation prompted traders to scramble for remaining stocks, often at any price.

While some mines continue to produce colored diamonds, volumes are limited. The Cullinan mine in South Africa remains a major producer of exceptional blue diamonds, while the Orapa and Jwaneng mines in Botswana produce blue and yellow diamonds, including the famous Okavango Blue. The Canadian mines of Diavik and Ekati have become important sources of yellow diamonds, while the Zimmi region of Sierra Leone also produces intensely vivid yellows. Brazil, Russia, and the Venetia mine in South Africa also contribute to enriching the global supply.

IMPROVE VISUAL APPEAL

Fancy colored diamonds represent less than 1% of global diamond production, and only a limited number retain their color after cutting. The cutting process for colored diamonds is highly specialized. Unlike traditional cutting, which prioritizes brilliance and carat retention, the goal here is to enhance the intensity of the color.

This encouraged cutters to cautiously explore new techniques, such as using split settings and sharp angles to manipulate light and amplify color brilliance. Furthermore, they discovered that radiant cuts preserve color better than other stone cuts. Companies like Choron Group, which specializes in shades such as pink, purple, blue, and yellow, and which contributed to the NDC report, have refined these methods, combining technology and artistry to ensure that each diamond reveals its full potential.

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A SPECTRUM OF VALUE

While the 4Cs remain relevant, the Gemological Institute of America (GIA) added three more elements in 1995 specifically for fancy colored diamonds: hue, tone, and saturation. In addition to these three criteria, which encompass 27 hues and nine degrees of saturation, collectors, dealers, and retailers also place great importance on visual appeal when evaluating a fancy colored diamond. According to the FCRF, factors such as color richness, dispersion, shade, and the stone's appearance relative to its carat weight all play a crucial role in determining its overall value.

For jewellers and dealers, progressing in the industry will require increased expertise in grading, provenance, and cutting techniques, as buyers become more selective and emotionally invested in the stories attached to each gemstone they acquire.

As Eden Rachminov, author of “The Fancy Color Diamond Book,” eloquently puts it: “In a modern society of abundance where almost anything can be bought, owning a rare fancy-colored diamond is a statement of individualism, underscoring the power of unattainable luxury.”

THE PINNACLE OF RARITY

In the world of investment, colored diamonds represent the most exclusive and highest-performing segment. Their geological rarity makes them prime assets for high-level portfolio diversification.

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Sources and inspiration: Rapaport & Natural Diamond Council