Tuesday, September 16, 2008

Rare Diamonds Equal Giant Returns

In 1987 the "Hancock Red" diamond sold for over $926,000 per carat at Christie's Auction in New York setting a new world record for the highest per-carat price paid for a colored diamond at an auction. The 0.95 carat diamond had been mined in Brazil and was put up for auction by heir of a Montana collector, Warren Hancock. It is believed that he purchased it in 1956 for $13,500. For the last twenty years, the Hancock Red diamond held the title as the world's most expensive colored diamond sold at an auction.

According to some stats, the same diamond could now be worth approximately $7 million. For the last 35 years the value of diamonds has doubled every six to seven years, and as the demand for colored diamonds increases the per-carat price continues to soar. With every 1 out of 10,000 diamonds mined being colored, the demand greatly outweighs the available supply of these rare diamonds.

In the last five years colored diamonds have become popular among newly engaged Hollywood stars. As more and more celebrities flaunt the spectacular colored diamond engagement rings, the trend for these diamonds continues to grow.

Since the sale of the Hancock Red, colored diamonds have fetched exorbitant prices although coming close, none have topped the record-breaking red diamond. In 1999 a 0.90 carat Fancy Vivid green was sold for $736,111 per carat and a 3.95 carat Fancy Deep blue sold for $420,557 per carat in 2001. In June of 2005 a 4.24 carat Fancy Vivid blue was sold for $426,415 per carat.

After twenty years the legendary Hancock Red diamond recently surrendered its title to a stunning six-carat blue diamond that sold for $1.32 million per carat at a Sotheby's auction in Hong Kong late last year breaking the long-standing price-per-carat record for an auctioned diamond. The total value of the diamond was nearly $8 million.

Investing in rare colored diamonds has been one of the best kept secrets in the diamond industry. Based on the history of the continual increase in value, investing in even the smallest diamonds is proving to have giant rates of return. With the demand for top quality diamonds, both Christie's and Sotheby's anticipate the price of colored diamonds to continue to rise in the following year.

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www.rarecoloreddiamonds.com

Rare Diamonds Equal Giant Returns
posted by Rare Colored Diamonds on Tuesday, September 16, 2008