Diamonds, they say, are the products of pressure. And now pressures in the global economy may be pushing diamond prices even higher.
Sotheby's this week sold a 8.41 carat purple-pink diamond for $17.77 million at an auction in Hong Kong. The sale, which took place against the backdrop of street protests in the city, was part of a string of auctions of wine and jewels that set new price records.
The price for the flawless, fancy vivid purple-pink diamond was far higher than the $15.5 million top estimate and works out to $2.11 million per carat-among the highest paid per-carat for a diamond, experts say.
Dealers and diamond experts say the sale shows that rising instability in the world, including the protests near the auction itself in Hong Kong, may not be hurting sales of high-end collectibles. In fact, experts say global unrest may be driving even more money into hard assets and collectibles like diamonds, art, wine and vintage cars, and could push prices even higher.
"Unfortunately, when we have adversity in the world, the people in the 0.0001 percent will put more money into these alternatives," said Mahyar Makhzani, the London- and Geneva-based managing director of the Sciens Colored Diamond Fund. "All of this unrest is not affecting the guy who's going to pay $10 million or $20 million for a diamond."
Sotheby's Hong Kong auctions, which included wine and art, were a big test for the company and the collectibles market, since they were staged in the heart of Hong Kong during the protests. But since today's wealthy buyers rarely go to auctions themselves anymore, preferring to bid by phone or through dealers, the street crowds didn't seem to dampen buyer interest.
The highest price ever paid for a gemstone was the $83 million paid for "Pink Star," a 59.6 carat flawless pink diamond sold by Sotheby's last year. On a per-carat basis, a 14.82 carat fancy vivid orange diamond was sold by Christie's last year for $35.5 million, or $2.4 million per carat.