Industry Analysis

Retail Group Sees Good Holiday; Fancy Color Diamonds Cap Auction Season

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The 14.93 ct “Pink Promise” Fancy Vivid pink diamond may be the most expensive stone Christie’s has ever sold at its Hong Kong auction house. The diamond is expected to sell for as much as $40 million. Photo courtesy of Christie's Images.

The U.S. National Retail Federation predicts that overall holiday spending will increase 3.6% to 4% over last year, citing a strong economy and rising confidence in employment and wages.
The trade group noted that retailers have been stocking record amounts of merchandise in preparation for a good season.
As reported last month, jewelry sales in the U.S. have been running 5.6% above last year’s levels. Demand for diamonds and gemstones, however, remains concentrated in relatively narrow categories of goods. In addition, according to press reports, consumers seem to be edging from tangibles, such as jewelry, toward travel and other experience-related products. This means competition for their discretionary dollars will be keener than ever.
Retail sales in China continue to recover with most of the major retailers reporting double-digit gains over last year’s totals. Demand for gem-set jewelry declined slightly on the mainland, but grew sharply in Hong Kong and Macau.


The sale of a 24.78 ct Fancy Intense pink diamond made news around the world seven years ago for its astounding price: $46.2 million. The diamond, named the Graff Pink by its buyer, brought the highest price ever paid for a gemstone at auction.
A similarly striking diamond (both were graded by GIA) was the centerpiece of Sotheby’s Geneva Magnificent Jewels auction on Nov. 15. It is 12.5 carats larger than the Graff Pink, but carried a pre-sale estimate of $20 to $30 million.
While the final price could go higher, the pre-sale estimate price reflects a key factor in auction prices at those extreme levels: the pool of potential buyers in the market for such a stone is quite small. If one or two major buyers are out of the market for some reason, prices for these stones can fall well short of similar items in previous sales, even as demand and prices for less costly gems remain solid.
It is true that auction prices for major diamonds and colored gems are not setting records at the pace they had several years ago, but in general they have remained solid.
The other major diamonds on the block at the Sotheby’s Nov. 15 sale were a pair of Fancy Intense yellows called the Donnersmarck Diamonds, named for La Paiva the Countess Henckel von Donnersmarck. The countess began a relationship with Prussian industrialist Guido Henckel von Donnersmarck in the early 1850s and married him in 1871. The two GIA-graded diamonds are 102.54 ct and 82.48 ct which, when last sold in 2007, brought in $3.25 million and $4.66 million respectively – with the smaller stone unexpectedly realizing the higher price.
A pink diamond that Christie’s calls “the most expensive jewel ever offered” at its Hong Kong house is expected to bring as much as $40 million on Nov. 17. The 14.93 ct “Pink Promise” diamond is a GIA-graded Fancy Vivid pink oval cut diamond mounted into a ring.
The same sale will also feature an 8.8 ct Fancy Intense pink diamond expected to sell for $8 to $12 million and an 8.17 ct Burmese ruby ring that is estimated to sell at $5.8 to $8 million.

Russell Shor is senior industry analyst at GIA in Carlsbad.