Auction price result misunderstood by the Market

Why did the 75.56 carat Fancy Vivid Yellow diamond sell for so low in New York, while other, much smaller, Fancy Vivid Yellow diamonds have been selling for a much higher price per carat? This is a question that I was asked several times since the auction took place almost 2 weeks ago in New York.

The market has to understand that the color depth of a fancy color diamond greatly affects its price. When a diamond is graded Fancy Vivid Yellow, the color grade still falls on a spectrum of color. In the industry, we use a color scale of 1-10 within a color depth to best gauge a diamond’s appearance.

On the scale, a grade of 1-3 means that the color intensity is weak and may border on the next color intensity down, Fancy Intense Yellow. The grades 8-10 mean that the color depth is strong and borders on Fancy Deep Yellow, the next color depth grade up. This grading system of 1-10 within a specific color depth is not recognized by GIA – that is why GIA will grade a color depth only as a term (without a number.

pic1A variety of fancy vivid yellow diamonds of different intensities            Image credit: pricescope.com

 

pic2The same yellow diamonds on a hand                     Image credit: pricescope.com

The 1-10 intensity grade would be decided by a diamond expert in fancy color diamonds who sees thousands of stones on a continuous basis, and therefore develops a keen eye for color. Obviously, the lighting of the room will affect the perceived color, and that is why a diamond specialist will always try to look at a stone using white light.

This 75.56 carat diamond had in fact a very weak color on the scale, falling within the 1-3 range. It was borderline Fancy Intense Yellow so the price level reflected that of a strong Fancy Intense Yellow in the upper scale of 8-10.

pic3The 75.56 carat Fancy Vivid Yellow diamond               Image credit: Sotheby’s

It is for this exact reason that fancy color diamonds must be viewed by an expert prior to acquisition. It is not enough to see a diamond’s certificate in order to know its true value. Regardless, the best certificate to rely on would be one from the GIA, as it is the most accepted within the industry.

An expert investor cannot acquire a fancy color diamond for investment purposes based only on the certificate, he must also utilize an expert.

The Diamond Investment & Intelligence Centre now offers its Concierge Services to its clients for this exact purpose. We are able to help you distinguish between a $50,000 per carat Fancy Vivid Yellow and a $90,000 per carat Fancy Vivid Yellow, and help you potentially save a great deal of money while still making a great choice.

Imagine buying this Fancy Vivid Yellow diamond for $90,000 per carat by viewing the certificate only or even seeing it yourself, and paying $6.8 million instead of $3.6-$3.8 million?

Not worth using an expert?

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