Is it a good time to invest?

“Since then, prices have steadily increased year after year due to unprecedented demand for fancy coloured diamonds from the Chinese market. It’s believed that a third of fancy coloured diamond buyers worldwide are Chinese.”

Within the company's collections are a pair of exquisite fancy vivid blue diamond rings and an impressive 10.24-carat fancy intense purple-pink diamond ring. Addressing other fancy-coloured diamonds, Abram underscores the enduring popularity of yellow diamonds in Hong Kong for over four decades. The jeweller has successfully cultivated a robust market for yellow diamonds, making them the brand's top-selling stones following white diamonds.

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Nevertheless, Abram observes a recent uptick in interest, driven by the escalating value of yellow diamonds: “Collectors in our region tend to make acquisitions as prices increase, resulting in a commensurate growth in appetite for these diamonds,” he says.

Chen points out that fancy yellow diamonds have proven to be a sound investment due to their affordability compared to pink or blue diamonds. She emphasizes, “The fact that most high-end brands are building jewellery collections with fancy yellow diamonds helps maintain their price stability,” she adds.

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Naturally, the allure of fancy-colored diamonds lies not only in their rarity but also in their quality, size, and beauty. The greater the intensity of the color, the higher the value. A flawless 15.10-carat De Beers fancy vivid blue diamond fetched an impressive US$57.82 million at Sotheby’s Hong Kong last year, while the 10.57-carat Eternal Pink, recognized as the most vivid pink diamond ever auctioned, sold for US$34.80 million at Sotheby’s New York in June.

These stones, distinguished by their supreme quality and size, are exceptionally rare, providing valuable insights into public sentiment that jewelers carefully consider—although private transactions also play a pivotal role in determining a stone's value.

Pascal Mouawad, co-guardian of the Mouawad diamond dynasty along with his brothers, echoes Abram's perspective on yellow diamonds. He notes that fancy vivid yellow diamonds are becoming increasingly rare and are thus maintaining their value. Mouawad's Hong Kong clients, he mentions, seek masterpieces characterized by flawlessness, a classical style, and smaller settings like rings or earrings. In contrast, their Middle Eastern clientele tends to prefer larger necklace sets. Mouawad observes that "[East] Asians appreciate quality rather than size."

Mouawad's father, a renowned jeweler and watchmaker to the Saudi Arabian royal family during the oil boom of the 1970s and 80s, was a notable collector of significant diamonds, providing the family with profound insights into the investment potential and collectability of these stones. Interestingly, Mouawad observes a softening market for blue and pink diamonds but sees it as an opportune time to invest, anticipating a market rebound.

While prices of fancy-colored diamonds have experienced a slowdown compared to the steep increases seen in the first half of the last decade, Harsh Maheshwari, executive director of Kunming Diamonds, a leading trading house in polished natural-colored diamonds based in Hong Kong, asserts that the color market is maturing without reaching its peak. Kunming Diamonds, with a particular fondness for pink diamonds, especially those from the Argyle mine of Western Australia, secured much of the last tender from the mine. Excitement looms as Rio Tinto, the owner of the Argyle Pink Diamonds mine, announced a special new Beyond Rare tender to the diamond industry, featuring intensely colored but small diamonds—less than half a carat in size—that will eventually find their way into prestigious jewelry collections

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Although Chinese clients tend to actively seek investment opportunities in these natural rarities, prominent jewelry houses may hesitate to acknowledge that certain pieces, crafted with considerable creativity and skill, are purchased primarily for investment purposes with the intention of resale in the future.

Yet, in the midst of these uncertain times, even the super-wealthy are making decisions with a forward-looking perspective.
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