Fancy Colored Diamonds, The Rarest On Earth

“A Diamond is Forever.” Possibly one of the most brilliant marketing campaigns of all time. Created by De Beers in the 1930’s this one small phrase created the foundation for one of our society’s most powerful symbols of love and commitment: the diamond engagement ring.

When you think of an engagement ring, what do you see?  For most, it’s a white diamond, typically round in shape. Tradition, availability, and ease of access to consumer information have made white diamonds the standard and most commercially desirable stone on the market. But for those who are looking for something different, something unique, and something that stands apart from the norm, let us entice you with an alternative: what our ever advancing industry officially refers to as: “fancy colored diamonds”.

Diamonds are the only gemstones in the world that form in every color of the known color spectrum. Although is it not uncommon for natural diamonds to have hints of brown and yellow, these hues need to be exceptionally intense/saturated for a diamond to be considered “fancy.” Any other color from the spectrum (excluding yellow) is considered fancy because of its relative rarity (less than 1%). Essentially, natural fancy colored diamonds are extremely rare. Of all diamonds that are mined, only 20% are considered “gem quality” (cut and polished for use in jewelry) and the other 80% are used for industrial purposes (i.e. diamond saw blades and drills). Of that 20% of gem quality stones, only about 1.5% are fancy colored diamonds.

As diamonds are pure carbon, in their purest form they are absolutely white. However, if certain chemical particles and circumstances are present during a diamond’s formation, the result is a colored diamond. For example, the presence of nitrogen creates yellow and orange diamonds.  The natural element boron creates blue, and radiation (natural uranium) creates green. Red, pink, brown and violet diamonds are created when heat and pressure change the lattice structure after formation to absorb different naturally forming colors.

Of course, some colors are more rare than others. In order of rarity there is red (less than .0005%), blue, pink, orange, and green. Pricing is determined accordingly. Depending on the color and intensity, a stone can be valued 20% to 5000% higher than a non-fancy diamond, and in many circumstances because some are so rare, we as an industry consider them priceless.  In fact in these cases, often the value can only be determined at auction.

This value creates desire. Bidding wars over important fancy colored diamonds at the world’s largest auctions regularly make headlines as people will go to great lengths to capitalize on these stones. In one famous story, a 0.95 carat fancy red diamond was auctioned at Sotheby’s for $900,000. It was an I3 clarity,  the LOWEST clarity grade a diamond can be given.  Only because of it’s rare color did it achieve this price.  In addition, an employee at Sotheby’s attempted and horribly failed to switch this rare stone out with a white diamond doctored with a small amount of red nail polish in an attempt to falsify this effect and capitalize on his/her own.

Fancy colored diamonds are making headlines today because of their tremendous growth in value. Whereas we have seen prices soar over the last few decades, the Wall Street Journal has recently reported that from 2005-2016, fancy colored diamond prices have increased an average of 275%, outperforming the S&P by more than double and any other financial matrix by a considerable amount. Of course one can never fully know what the market is going to do, but this compelling data is perhaps indicative of a future trend in investing as more people look for better returns through diverse assets.

It is no secret that we are immense admirers of fancy colored diamonds here at D&H. Since our inception we’ve been drawn to the lush and vibrant beauty that they bring to our designs.  A genuine understanding of their rarity attracts us to them just that much further: now we would be honored to invite you into our fancy colored diamond fan club and introduce you personally to our collection of these exceptionally rare gems.