Coloured diamond rarity

In addition, investors must also understand which diamond colours are perceived in the commercial marketplace as being more rare than others.

Table W.1

Table W.1 is designed to explain different levels of rarity. However, there are exceptions, such as pure orange diamonds, which are almost as rare as reds or blues. Orange is more common with secondary colours of brown or yellow, whereas blue and red rarely appear as secondary colours.

It is important to understand that stones that are classified as modestly rare, such as yellow diamonds and brown diamonds, have also seen dramatic sales increases because of their affordability, beauty and rarity relative to colourless diamonds. Canary yellows and cognac browns are two of the most popular offerings in the market, with sales at the retail and auction level continuing to increase.

Conversely, stones classified as extremely rare are truly one of a kind pieces and are available in the open market only a few times a year. These stones continue to set new record prices at auction on an annual basis and will often see several buyers competing for the same stone. A 1 carat red diamond just sold privately through a US dealer for $1.5 million dollars, while a 6-carat vivid blue diamond sold at auction for a new record price of $1.3 million dollars per carat. Both scenarios have a positive impact on the market and add to the continuing demand and appeal of coloured diamonds.

In the coloured diamond marketplacewhere buyers compete against one another to own the so-called best stones for their collection and/or portfolioknowing the order of coloured diamond rarity from least rare to more rare is an important step in determining a diamonds present and potential value.

Certificates & reports

When purchasing a fancy coloured diamond, it is essential that the stone have an origin-of-colour report from the GIA or one of the other qualified gemological laboratories.  The most identified laboratory in the world for grading and certifying coloured diamonds is the GIA. The GIA will analyse the stone and create a colour-only report, which identifies the colour, the weight, the measurements and colour grade. This report will also determine whether or not the diamonds colour is natural and unaltered, which is the single most important information on the report. The GIA also produces more detailed full-certificates, which includes the clarity, a measurement of the fluorescence of the stone and an analysis of the shape and polish of the stone. The other laboratories used for grading and certification are: the IGI, EGL, Gubelin and the HRD. A Stephen Hofer report from Fancy Color Consultants is also a valuable coloured diamond document. Mr. Hofer analyzes and measures the colour, provides a historical reference for that type of stone and explains why that particular piece is a rare and unique collectors item.