One of the reasons that diamonds are so popular, other than the obvious appeal of their beauty, is that they are a form of currency that is easy to transport and retains its value as an international currency. You can take several million dollars worth of diamonds from Hong Kong to London or New York far easier than you can most other forms of material wealth, such as paintings. It is one of the simplest ways available to take large amounts of wealth with you.
More and more people are getting in on the diamond trade. Diamonds are becoming popular in Asia, as is evidenced by the recent auctions and the high prices that these precious stones are fetching. The auctions are exciting, and some of the prices these rocks obtain are unbelievable.
An almost flawless 101-carat diamond was recently sold at auction in Hong Kong for $6.2 million. The diamond had the third highest clarity rating of VVS1, and the third highest ranking on a scale that is used to measure colorlessness. The presale value of the stone was estimated at around $8 million.
The stone, a near perfect diamond, is a bit larger than an egg and was mounted in a tiara rather than a ring due to its massive size. Many of the prospective buyers commented on the quality of workmanship that went into crafting such a large diamond.
A number of other precious gems were sold at the auction as well, including a 16-carat diamond, also colorless, a10.36 carat green diamond, and a pair of emerald earrings that once belonged to the Grand Duchess Vladimir of Russia. At another auction, a blue diamond sold for a record price of several million dollars, as did a 72-carat flawless, colorless diamond. It seems that diamonds are still a hot commodity all over the world, from Asia to the United States.
While the above diamonds, which are selling for millions of dollars, probably aren’t the types of precious stones that most people can afford, it is still possible to invest in diamonds. Large carat diamonds, meaning those that are above 5-carats but less than the massive golf ball sized diamonds that sell at auction, can be good investments. However, diamonds that are colored (purple, red, green, blue, yellow) seem to have the best appreciation record. Their prices have not fallen since the prices of such stones were recorded in 1970.
Blue diamonds have doubled in price every few years, and yellow diamonds have doubles in price about every ten years. It makes sense to invest in these colored diamonds. They can be sold if needed, or passed on to the heirs. Diamond investment is more solid than real estate, which has the ability to fluctuate so much. A house that was worth $2 million last year could only be worth $1.5 million this year because of the problems in the housing market. Diamonds, as the saying goes, are forever.
What is it that makes a diamond worth so much though? Many people believe that diamonds are so valuable because they are rare, but this is not the case. It is all a matter of supply and demand. The amount of gems allowed onto the market is controlled very strictly, causing the demand to be greater than the supply. Thus, the price of diamonds is high. It is a marketing strategy that is as old as marketing itself. You can see it in action today with oil.
Other things factor into the price of a diamond, as well. These are the 4 C’s, which are color, clarity, cut, and carat. Different combinations will result in different prices. For example, a diamond that is 2 carats, has a poor cut, and is unclear may not sell for as much as a 1-carat diamond with perfect clarity and color. This means that Mother Nature can only do so much to make a perfect diamond. Human craftspeople must take the rough diamond and make something that is beautiful and retains its value.
The diamonds that sold for such high prices at the auctions in Asia were very special diamonds that were both very large (101 carats!) and had good color, clarity, and cut. You can expect to see more of these massive diamonds to go up for sale at auctions around the world in the coming years.
These large diamonds are certainly not the type that someone is going to wear to the theater. Large gems such as these are often kept locked away or perhaps put on display under high security.
One of the most important things about diamonds, however, is the joy that they can bring into a person’s life. This is something that can be overlooked in the frenzy of an auction. Even if you plan to buy a 2-carat ring rather than a 101-carat tiara, the loved one in your life will appreciate it!
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