Sotheby’s latest auction in New York on November 20th set a new auction record for price per carat for any diamond. Onlookers may contend that the sale of the rare Fancy Vivid Blue diamond will affect the market price of blue diamonds, but this stone should not set a new benchmark for blues – it is a stone with exceptional qualities and it remains in a class by itself.
Mellon’s pear-shaped, 9.75 ct, Fancy Vivid Blue, VVS2 (potentially IF) diamond sold for $3,348,205 per carat and was the top lot of the auction. The stone’s estimate was $1.0-$1.5M per carat, which indicates that the stone sold for more than double its high estimate.
According to The Fancy Color Diamond Index, blue diamonds appreciated 161.4% over the last decade, with Fancy Vivid Blue diamonds appreciating in value by as much as 172.3%. A mere 29% of blue diamonds are flawless or internally flawless and only 1% are designated Fancy Vivid.[1. John M. King, Gems & Gemology In Review: Colored Diamonds (Stevens Point: Worzalla, 2006) 159-162.]
In fact, the realized price of the Mellon diamond is the minimum price an end consumer would have to pay for a blue diamond sold by a luxury jewelry brand. Public record-breaking prices only indicate prices at auctions – they do not incorporate actual retail prices, where the majority of transactions occur. Auction prices for fancy color diamonds are occasionally lower than what end consumers would pay in retail, but this usually implies that the stone needs to be recut or improved in some way.
Investment potential creates a real demand for exceptional stones. The Mellon diamond’s undertone[2. Undertone: the presence of a unique tint in a color.] is truly spectacular and its overall aesthetic cannot be compared to the values of other blue diamonds currently in the market – more specifically, Vivid Blue diamonds should not see a significant price increase because of this sale. Based on the quality of its color, we are led to believe that this stone likely originated in Brazil, where extraordinarily deep blues were unearthed in the past. Conclusively, this stone is highly unusual and its price should not reflect the state of the blue diamond market.
The auction record for any diamond price per carat was set by a 14.82 carat Fancy Vivid Orange diamond sold for almost $2.4 million in November 2013. The Wittelsbach Diamond set the previous auction record for any blue diamond for a total of $24.3M in December 2008.