The art world is an unregulated and opaque market with significant private and public transactions. Advisors guide collectors and investors, ensuring they do not overpay while offering discipline and market analytics. This model doesn’t necessarily exist when acquiring jewelry. Retail prices are often higher than the intrinsic value of the material and stones, and clients are shocked to discover their fair market value.
Jewelry connoisseurs understand the three c’s (cut, clarity, and carat) but are unaware of additional factors influencing value. Color saturation is important, and its interpretation and identification change as the market evolves. When diamonds are mounted, color can be enhanced by the mount or foil backing. Additionally, the mount or cut of the stone can hide flaws. This isn’t always disclosed when acquiring through a dealer or designer, and accompanying certificates give the client a false sense of security.
It is imperative to work with a knowledgeable advisor such as PMAA’s Advisory Team when acquiring jewelry and loose stones. The following article discusses the myths surrounding red diamonds, highlighting the importance of seeking experienced advisory when navigating the jewelry market, as independent advisors can bring discipline, market analytics and due diligence to collecting.
The Diamond Investment & Intelligence Centre (DICE), Published August 9, 2020
RED DIAMONDS: UNDERSTANDING THEIR RARITY
Red diamonds are not the rarest color in the world! Now we can review the myths…
There are other colors that are rarer such as violet, purple and orange. So why are people under the impression that red diamonds are the rarest? There are so many individuals in the world that claim they know how many red diamonds exist. Some auction houses claim that there are only 29 red diamonds in existence. That is false. Some dealers claim that there are only 30 red diamonds in the world, which is also false. Even some geological websites claim that red diamonds are the rarest colors, which is also false. Do red diamonds even exist? if so, how many do exist? and if they don’t exist, then why does the GIA (Gemological Institute of America) certifies them as such?
What are the various theories? What is the truth about red diamonds? How many exist? These are all very good questions, and it is time to address them all properly.
RED DIAMONDS THEORY #1
The Argyle mine in Australia produces 90% of all pink and red diamonds.
It is believed that the majority (90% as stated) of all pink and red diamonds are mined in the Argyle mine. This theory can be easily verified. There are official documents (mostly Kimberly Process) that can trace back the majority of rough diamonds to mines and therefore we can use this method as a way to verify. Some red diamonds were found in India decades ago from the Golconda region which was also famous for its blue diamonds. This can also be verified as the GIA can easily determine the origin of such diamonds. If we go back less than 40 years, we will find that the Argyle mine has indeed produced the vast majority of pink and red diamonds; just follow the money and sales…
RED DIAMONDS THEORY #2
There are only 29 or 30 red diamonds in existence.
That is completely false. I am personally aware of at least 100 red diamonds in existence, and I am sure that some of the top fancy color diamond dealers that trade in red diamonds are aware of a few more…There is a single collection that has 51 red diamonds in it, from as large as a 4.59 carat red diamond to a 0.24 carat red diamond. With a total weight of just above 50 carats. There is another large collection of 25 red diamonds.
A very well known dealer, who also produced a rare diamond cross with 11 red diamonds in it, has many other red diamonds in his personal collection. There is an online dealer (which has the largest diamond collection offered on the internet) that has more than 25 red diamonds listed. Let’s not forget that there are many other red diamonds owned by private individuals that have been acquired over the years that we are not aware of.
RED DIAMONDS THEORY #3
Are red diamonds real? The answer is yes, but only relatively recent.
The best known gemological laboratory is the GIA based in New York and Carlsbad, with many more satellite labs around the world. Before the 1970’s color diamonds were such a rarity that they were discarded by the trade. The GIA started certifying red diamonds only recently (as recent as the 80’s). Prior to that they were all certified as pink diamonds, and in fact, if we look at the pink diamond color chart by the GIA, we will find that at the bottom right corner, there is an area called Fancy Red.
That is the reason that the red color has only 4 categories; Fancy Brownish Red, Fancy Orangy Red, Fancy Red and Fancy Purplish Red. You will not find a single GIA certificate that certifies a red diamond as Intense Red or Vivid Red. The most desired color is Fancy Purplish Red. It has a more lively color than a pure Fancy Red color, and therefore more attractive to the eye. A pure Fancy Red diamond has a more dull color.
RED DIAMONDS THEORY #4
The current largest certified red diamond is the 5.11 carat Moussaieff Red diamond. It has a flawless clarity. There are 2 more known certified red diamonds in the 5 carat size, there is a 4.59 carat red diamond and then the weight scale goes down to the 2.00-3.00 carat area with a 2.71, a 2.29 carat, a 2.26, a 2.11 carat, a 2.09, a 2.06 carat, a 2.03 and a 2.00 (to my knowledge). Then we go down into the 1.00-1.99 weight area with many more.
I heard that there is a 3 carat red diamond that exist, but I have not seen the certificate to confirm it myself. The vast majority of red diamonds are below the 0.50 carat mark. It is extremely rare to find red diamonds with clarities better than SI1. The vast majority are SI1 and below down to an I3 (or half cert). Rarely we see a VS2 or better such as the 2.11 Argyle Everglow. Such a combination makes a Red diamond extremely rare and very much desired by investors and collectors.
RED DIAMONDS THEORY #5
There are not many red diamonds sold in auction.
It is true that since 1987 when the 0.95 carat round brilliant Hancock Red Diamond was sold for whopping $880k (a newsworthy sum at the time), there have been only 22 red diamonds (or 25 if we count multi red diamond jewelry pieces) that have been offered and sold at auction. The question is why not more red diamonds have been offered (like blue and pink diamonds)? The answer is simple. The vast majority of people, including dealers, do not really understand red diamonds and therefore prefer not to deal with them, unless they have a client that specifically asks for one.
Another famous red diamond that sold at auction, which also holds the current record price per carat for any red diamond sold at auction, is the 2.09 carat, Fancy Red, Heart Shape, with SI2 clarity. It was sold by Moussaieff. It was sold in November 2014 at a Christie’s auction in Hong Kong for over $2.4 million per carat. This 2.09 is the perfect example proving the Red Diamonds Theory #3. This 2.09 carat red diamond was an Argyle tender diamond which was certified as a pink diamond when it was offered.
This article summarizes the information and theories about red diamonds and their rarity. Are red diamonds rare? Yes. Are red diamonds the rarest color on earth? No. Violet and purple are; both in terms of quantities as well as in sizes. There are no pure violet and purple diamonds in the 5 carat size like red, not even a single diamond.
When buying a red diamond, one has to work with a trusted advisor that will not have a conflict of interest. The advisor will point out those red diamonds that may have a brown tint or an orange tint to it which should be avoided. The advisor will also help in properly valuing such a diamond and will also help acquire such a rarity.
Read this article at The Diamond Investment & Intelligence Centre (DICE).