As the who’s who in the glitzy world of high-value diamond auctions gathered in Geneva in May, there was an understated tone to this year’s pilgrimage to the Swiss city. While Sotheby’s and Christie’s played up their offerings of magnificent jewels, which usually boost market sentiment with the records they set, dealers approached the sales with some trepidation. The big-stone market, they noted, has seen better days.
The major auction houses are setting lower reserve prices than before in response to the weakness, explained Johnny Kneller, CEO of big-stone manufacturer Safdico.
At the Christie’s Geneva auction, a 12.50-carat, D-color, VVS1-clarity, potentially internally flawless rectangular diamond sold for “just” $68,000 per carat. While the stone had non-ideal proportions, the price reflected a serious slowdown in the big-stone sector, stressed Thomas Faerber, a jewelry dealer and co-founder of the GemGenève trade show. The final price was 27.5% off the Rapaport Price List, according to Faerber’s calculations.
“Apart from the 77% depth, it was a beautiful stone, and I would have expected it to fetch around list price in a better market,” Faerber added.
The sale was not an exception. Prices of large stones have been plummeting for six months as an array of challenges have dented sentiment, with each discounted sale setting off alarm bells in the trade, knocking confidence further. The RapNet Diamond Index (RAPI™) for 3-carat stones dropped 12% in the first half of 2019, compared with a 3.1% decline for the 1-carat category.
“It’s a vicious circle,” a rough broker said on condition of anonymity. “Some people are expecting prices to come down further, so are delaying their purchases. The one leads to the other.”
Dealers identified four main factors contributing to the downward spiral.
