The Attraction, The Trend, And The Treasure: Part 1
Who loves color? We all do. It is something that evokes emotions and memories, tells stories, and can be symbolic. The color trend in jewelry has been going on for a while now, and we are going to talk about how it is stirring in the market place, particularly in natural colored diamonds. Color is not only sentimental, but it represents a fine investment in rarity upon the earth. Regardless of the market swings, the colored diamond is a holder of unique currency. According to the Gemological Institute of America(GIA), in Carlsbad, California, one in 10,000 diamonds would be considered a fancy colored diamond. As a newcomer to observing this market, I have learned that the natural chemical occurrences are rare indeed and extremely limited to only a few locations in the world.
Let’s start this off with a bit of recent events in the world of sparkle. With the recent sales of prominent colored stones, the gain in popularity and value is reflected in record setting purchases. For example, consider the Oppenheimer Blue, a 14.62 carat fancy vivid blue diamond sold at Christie’s Geneva Auction in May of 2016. It was sold for a record $57.5 million Swiss francs, surpassing the sale of the Blue Moon of Josephine. Which sold at Sotheby’s in Geneva November 2015 for $48.4 million swiss francs to a Hong Kong billionaire for his daughter. A superbly rare pear-shaped 15.38 carat pink diamond called the Unique Pink, sold for $31.6 million at Sotheby’s in Geneva May 2016. It is the most expensive fancy vivid pink diamond to ever sell at an auction. The 5.03 carat Aurora Green, a fancy vivid green sold for $16.8 million in Hong Kong in May 2016. It set 4 world auction records for a green diamond including largest fancy vivid green diamond offered at auction, most expensive green diamond in the world to be sold at auction, the most expensive green diamond to be sold in Asia, and the highest per carat price ever sold for any green diamond in the world at auction Christie’s.
Embarking on a journey to understand more about this enticingly colorful market, I have interviewed 2 jewelry experts who come from different and engaging perspectives. Let’s explore these conversations about this highly precious market, beginning with a New York City based expert.
A coloured diamond is a touchstone of the universe, a little something God created that man can’t always find…they are the last frontier of collectable.” – R. Winston 1986
My first interview was with Mr. Bruno Scarselli of Scarselli Diamonds in New York City. Mr. Scarselli comes from an extended line of diamond cutters and caretakers. His grandfather began the Scarselli business in New York in 1955 after relocating from Italy. Due to his diamond expertize, the business had been known for fine jewelry and accessories. Over the last half of the 20th century, the Scarselli family has grown the colored diamond business through 3 generations, building on each stone that has been examined, cut, and polished into exemplary pieces. They began with colorless diamonds in the 1950’s and 60’s, and pursuing the less known colored diamonds in larger sizes of 15 to 60 carats. They began moving away from the colorless diamonds, seeing the opportunity to showcase these rare gems. Bruno reflected the early culture and vision. “My grandfather was always envisioning a fashion statement.” This painted a picture in my mind of a hardworking craftsman approaching the bench, his vision blossoming as he cut each shape. “We started to look to Asia where we could combine pearls and rubies, sapphires and the colored diamonds to make pieces of art.” It was at this moment that I realized the importance of the Scarselli family being caretakers of color.
Bruno began cutting diamonds when he was just 15 years old, accumulating as much knowledge as he could. He told me, “Since colored diamonds are a specialty that few people in the industry have, it is acquired through the entire process. From knowing the specific mines and veins the colored diamonds come from, to the chemical composition, I act as the gemologist, the purchaser, and interact with the stone cutter, bringing me to ultimately the point of customer service.” I could hear the pride coming through the phone at this point, and there is no doubt Scarselli Diamonds is here to make the best journey possible for each gem they choose for their clients.
“There are very few schooled in the understanding of colored diamonds,” said Bruno. “Travel takes you to all tenders of the world to find the best colored diamonds. You also need to understand what to speak to for rarity and shape in colored diamonds.”
I did do a bit of inquiry to understand the possibilities in this elegant world of carbon color. To give you a brief overview, the colors of natural diamonds are defined by the chemical composition, luminosity and even fluorescence. Grading is complex, and to be certified as a fancy colored diamond takes many steps in an appraisal. This is executed by a person highly trained and certified by the GIA. They measure four quality factors including color, clarity, cut and carat weight. Fancy colored diamonds can be classified into the families of brown, black, grey, white (milky or opalescent), yellow, orange, green, blue, purple, pink, and the rarest being red. They range in color grades from fancy light, fancy, fancy intense, to fancy vivid. If you are an investor, you may be researching at the Fancy Color Diamond Index at the Fancy Color Research Federation. Colored diamonds are usually found in certain mines known for specific veins of color influenced diamonds. For example, Rio Tinto’s Argyle Mine in Australia and Petra Diamonds’ Cullinan mine near Pretoria, South Africa produce a high percentage of the blue diamonds found. Blue diamonds have a small amount of boron atoms within to give them their blue color.
Scarselli Diamonds has become a global authority of these natural resources. In 2010, some of the Scarselli gems made a rare diamond media appearance. They have also shared with the public the largest red heart shaped diamond, seen here with exuberant CBS cohosts. The 1.71 carat heart is one of the most unique fancy vivid red diamonds in the world. These are some of the best of the best. Their pursuit of excellence also unified an extremely rare group of gems deemed The Olympia Collection. It is a spectacular group including a natural fancy vivid blue green, natural fancy vivid purplish pink, a natural fancy vivid orange, a natural fancy vivid blue, and a natural fancy vivid orange yellow. This collection was exhibited at the American Museum of Natural History’s Morgan Memorial Hall of Gems in 2009-2010. Their record breaking 90+ carat fancy vivid yellow diamond the Golden Dragon is a marvel to behold.
Now that I had an introduction, I wanted to know more about the natural colored diamond trends. Bruno focused on two primary markets, the US and the Asian markets. “In the US, the best interest is primarily in size more than the color. You may have a customer more interested in a larger stone such as a 5-carat pink, but not as a vivid classification. There is the dilemma of rare versus sought after. The two should be similar, but they are not.”
“In order to derive the best color, it is by getting away from a sharp, brilliant cut. The number 1 enemy for color is the principle of brilliance. Brilliance kills color. You will see 4, 5 , 6 even 7X more color in a fancy round than in a brilliant cut,” says Bruno. However, brilliance is a big part of the sales here in the US. “The 2 most sought after cuts to enhance color are the round and emerald cut. You will see those more in other markets.”
Bruno outlined the top 3 US color trends. “If you are pursuing value, the yellow diamond gives you more for your money and is often surrounded by white singular diamonds. Pink is validated by consumers. Blue is far behind because there is less appreciation and growth and the US is slower.” Colorless diamonds are said to be preferred and easier to sell here, but Bruno says otherwise. “Completely untrue. Colorless diamonds are more abundant and prices are volatile. Most fancy colors can sell with a profit on any stone purchased in recent years. Westerners are slow investors in color, so there is little change in their buying habits.” He mentioned another resource, Fancy Color Research Foundation, which I had found online. According to Mr. Scarselli, yellow is somewhat conservative, while blue or pink takes more patience and budget.
Two movements have led both markets Bruno points out. First, “there seems to be a culture within the culture of executive women who know what they want.” Design is a bigger part of the relationship of colored diamonds. Cocktail rings and exclusive pieces are more collector types at the high price points. “In the US the interest is for larger and more flashy pieces. More interest is being generated in diamonds in the $35K-70K price range, but the focus is not on the quality or color, but being usable with a white center stone and less elaborate settings. The cluster pieces, white with multicolor, are also gaining in popularity. We discussed multi-color pieces, where 2 different colors mounted can accentuate one of the colors compared to the other. It is a skill that is developed over time to work these color combinations affected by refraction of light. I personally imagine this will be a growth area, celebrating rare color combinations.
“In Asia, there is a tendency to look for strong color, with intense and refined clarity. This would be more in the 1-2 carat range.” There is more growth because this marketplace contains many high net worth individuals (HNWI) interested in the value and beauty of colored diamonds. The Asian market is a special place. Perhaps it is the appreciation for things so rare in nature that inspires Asian tastes, similar to pearls and precious metals. The recent sale of the Aurora Green to Chow Tai Fook Jewelry is an example of the interest in Scarselli colored diamonds.
“Creating value is essential. Jewelry is working on less profit, and demand for unique is becoming more highly sought, but there is still a need to define a market.” Bruno’s point was clear. The cut colored diamond can be the objet d’art and the inspiration for many collectors. I am curious to see if the high-end jewelry market moves using color as a more defining barometer than it has been in the past. Although the overall diamond market has slowed, the focus on color should continue. I personally believe the closer we get to other planets, the more our natural resources will be valued!
Second is the movement of interaction on the internet, it has been a long-term movement. Retail stores are suffering, but they are becoming more active on the internet than at the retail space which is good. The digital presence for high quality stones is key. Bruno has definite insight. “The diamond market has to have luminosity and exceptionally high quality photography to appeal to the $10 million buyer who is working off the internet for research. 90% of the big buyer work is done online. Since 60% of the time spent is on cleanup of dust in a photo, tech behind the photography is a key factor.” Digital tech is going to be where the growth of customer interaction will expand.
I have noted such movement being redefined in all phases of the customer environment. This includes making retail spaces more a social engagement center to share their customers love of gems, and intertwining with social media ops for photos. Tiffany’s Union Square store in San Francisco recently did this with their recent makeover cumulating in a re-opening extravaganza. It is the fight that all retailers have to keep space engagement. The message across digital media must also intrigue a customer for an in-person experience. Portraying color digitally is a substantial challenge and most important in the colored diamond business. The interaction for local retailers is securing time from a consumer to see them up close. They must push the educational aspects of colored diamond investment to be worth the consumer’s efforts, and emotional attachment to finish the sale of getting them to walk in the door. Those interested in color will be captivated!
Thanks for investing time here and stay tuned for my next interview with another experienced jewelry expert in the retail diamond marketplace!
Photo credit: Comartlab (featured stone is a 3.19 carat Cushion Fancy Greenish Blue VS2)
Fancy Color Research: https://www.fcresearch.org/
Aurora Green on Christies.com: http://www.christies.com/about-us/press-archive/details?PressReleaseID=8346&lid=1
Gemologists of America: https://www.gia.edu/fancycoloreddiamond-quality-factor
Oppenheimer Blue and Blue Moon of Josephine: http://www.investments.diamonds/oppenheimer-blue-diamond-helps-christies-gain-edge/
Pink Unique: http://www.sothebys.com/en/news-video/slideshows/2016/the-best-selling-jewels-sold-this-year.html
American Museum of Natural History: http://www.amnh.org/
Olympia Diamond Collection: https://vimeo.com/46841628 https://www.jewelry.com/blog/tag/olympia-diamond-collection
Petra Mines Cullinan: https://www.petradiamonds.com/our-operations/our-mines/cullinan/
Rio Tinto Argyle: http://www.riotinto.com/australia/argyle-4640.aspx