Natural Fancy Color Diamond prices

What influences Natural Fancy Color Diamond prices?

22 April 2016|Diamonds Investment

Natural fancy color diamond prices

“A diamond is just a piece of charcoal that handled stress exceptionally well” –Anonymous

‘Natural fancy color diamonds’ are colored by nature due to interstitial impurities or structural defects which will affect their light absorption. Sometimes, the color detracts from the diamond’s value, but in most cases the color will enhance the value of the diamond and this has many reasons.

Natural fancy color diamonds are rare.

Only one out of ten thousand diamonds is considered to be a natural fancy color diamond, which makes them very rare. So when it comes to the pricing of these diamonds we can apply the basic rules of economy: supply and demand will determine the prices of the different colors of fancy color diamonds.

Trends have a big influence on the demand of natural fancy color diamonds.

People always want what they can’t have or what others don’t have, like extraordinary and rare diamonds and they are willing to pay a lot in order to become owner of the most exclusive ones. This is why they keep breaking auction house price records.

The Oppenheimer Blue Diamond

The Oppenheimer Blue Diamond

Furthermore, in the last few years we saw an upcoming trend of people preferring fancy color diamonds over white diamonds, as they have been buying white diamonds for the past 80 years and finally want some change.

However, this trend is easily influenced by the preferences of famous people and the marketing decisions of major brand houses. When a celebrity is asked to marriage with a fancy yellow diamond engagement ring, the demand for fancy yellow diamonds will automatically increase. Also, when major houses, for example Tiffany’s, decide to increase the amount of a certain color diamond in there storefronts, people tend to desire this color diamond even more, especially when the houses start rebranding the diamond by giving them trendy and catchy names.

Natural fancy color diamonds are becoming scarce.

The supply is basically determined by the scarcity of the diamond’s color and how hard it is to obtain it. The supply of natural fancy color diamonds is already decreasing, but the closure of ‘The Argyle Mine’ in Australia will impact the supply even more.

In general we can conclude that natural fancy color diamonds have a safe position in the market because of their rarity and the strong demand for something new and potentially profitable by the retail segment. However, natural fancy color diamonds are not only interesting for the retail business but also for investors. When the Stock Exchange is tumbling and the Real Estate prices are too high, diamonds are becoming more and more popular as an alternative investment. Today, investors are turning to diamonds for their long-term value, as well as their asthenic qualities.

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