An independent diamond industry analyst and consultant said although exceptional and ‘one-off’ diamonds are hard to assign a value to them, the Pink Legacy will likely fetch $2.64 million per carat when it goes under the hammer next month in Geneva.
Paul Zimnisky, CFA told Rough & Polished’s Mathew Nyaungwa in an exclusive interview that the 18.96 carats stone was one of the most extraordinary diamonds due to the quality of its colour.
His comment dovetails with Christie’s auction, which projected the fancy vivid pink to fetch between $30 million and $50 million.
Meanwhile, Zimnisky said De Beers’ Lightbox had registered an initial demand for the larger-carat sized products than anticipated.
The company’s 1-carat solitaire pendants and some of the 1-carat total weight stud earing sets that had sold out days after its launch were now being restocked.
NB: Zimnisky has a monthly industry report called “State of the Diamond Market”
Below are excerpts from the interview.
Christie’s has projected that the Pink Legacy will fetch between $30 million and $50 million. Do you think this is achievable?
This is one of the most extraordinary diamonds in the world due to the quality of the color. With these truly-exceptional, “one-off” diamonds it’s almost impossible to assign a fundamental value to them. A lot of times the final price is set by how the buyers are feeling in the moment. That said, the high-end of the range is certainly achievable, which equates to $2.64 million per carat. For comparison, in 2010 the Graff Pink sold for $1.86 million per carat, which equates to $2.15 million in 2018 dollars, and last year the Pink Promise sold for $2.14 million per carat. Hopefully the diamond does not self-destruct like the Banksy work at Sotheby’s a few weeks ago!
Prices for top-quality large pink diamonds are said to have increased exponentially over the years driven by collector demand. Where is this demand coming from?
The buyers of these diamonds tend to be people or companies that have hundreds-of-millions or billions of dollars, so even though these diamonds cost millions of dollars they represent a relatively small percentage of the buyer’s net worth. Diamonds like this can provide some diversification to portfolios that already hold everything else you can imagine.
Do you consider a diamond as a form of investment?
Not really, especially not for most people. The minimum price point of an “investment-quality” diamond is in the hundreds-of-thousands or millions of dollars in my opinion. In addition, the transaction costs are very high, the liquidity is low, and the holding period necessary tends to be quite long.
Photo © Argyle, Rio Tinto.