Diamonds Steal the Show

RAPAPORT… Christie’s New York sale of Magnificent Jewels launched the U.S. fall auction season with a $47.7-million bang.

Diamonds selling for over a million dollars are becoming the norm at auction as prices across the globe for spectacular jewels reach to the heavens. The trend continued at Christie’s New York sale of Magnificent Jewels. Nine of the top ten lots — eight of which were diamonds, the other was a two-strand natural pearl necklace by Cartier — rocketed past the million-dollar mark, boosting the bottom line to $47,773,275 against a presale estimate of $25 million to $28 million. A relatively small sale, there were two catalogs — one showcasing the jewels from a “distinguished private collection,” which was 100 percent sold, and the second, the Magnificent Jewels catalog, which was sold 94 percent by dollar value and 89 percent by lot. This compares to the April sale, which featured eight lots that topped the million-dollar mark and garnered $39,094,080 for 264 lots. The New York October 2006 sale pulled in $49,032,080, but that sale included the Ellen Barkin Jewels, the Van Cleef & Arpels Centennial Tribute and the Art Nouveau jewelry catalog, all of which were attached to the Magnificent Jewels sale. This sale’s total is one of the highest ever achieved, and diamonds were a big part of it.

“The sale was successful because of a combination of well-priced rare jewels and also a greater focus on stones this time that the market is eager to acquire,” explains Rahul Kadakia, head of jewelry for Christie’s Americas. “Large rough is getting more and more difficult to find while demand keeps soaring. Also, with the fluctuations in the economic market, diamonds, like gold and other commodities, have become a channel where funds can be diverted.”

THE ACTION

The salesroom was buzzing with activity on the floor, on the phones and over the internet as buyers — mostly from the U.S., Asia and Europe — vied to get the crème de la crème. Privates were, as always, eager bidders, as was the international trade, some of whom were able to make purchases, while others were strong underbidders. The top lot was a 5.07-carat, rectangular-shaped fancy intense blue diamond set as a ring with a pink diamond micropavé surround. It sold for $2,885,800*, or $570,000 per carat, to Chatila of Geneva. The stone was bought within its presale estimate of $2.2 million to $2.8 million.

Buyers couldn’t get enough diamonds and bidding was active. Some dealers were lucky and scored; others bid and missed the mark. “I’ve tried to buy a lot, but I’m always the underbidder by about 2 or 3 percent, and that’s after fighting really hard,” reports Moses Abraham, of New York-based Mondus International.

Despite the bidding competition for various lots, prices were not off the chart, according to Ara Arslanian, chief executive officer (CEO) of Cora International. “There were not extraordinary prices, but nothing was bad. All the prices were normal, but strong.”

Notable at this sale was that not only were the top-of-the-line diamonds selling but so were the diamonds that even a couple of years ago would have been considered undesirable. There were several stones in the sale that while they were significant in size — over 10 carats — they were in the H through M color range or SI2 clarities; or they just barely fell into the realm of colored diamond, with the color so pale as to make the stone seem more off-color than truly a colored diamond. In previous years, these stones would have been passed over without a second glance and dealers would have shaken their heads as to why these diamonds were even in the sale. But times have changed.

“The market is strong for lower color and clarity,” comments Gary Dimenstein, of Dimenstein and Son. “Those diamonds have made a resurgence because of price and scarcity of goods. Someone may want a big stone, but they can’t afford the higher qualities. People still want D, E, F, but now there is demand for H, I, J and K.”

Kadakia concurs that price is a huge factor in the changing market. “A 10-carat D flawless today is trading anywhere from $95,000 to $100,000 per carat; three years ago, this figure was closer to $65,000. There will always be clients who want to acquire only the best, but as prices touch a new level, buyers are looking at commercial diamonds as a more affordable alternative.”
The Christie’s auction reflects the general market trend. Buyers are coming from new markets, predominantly China, India and Russia, all flush with new wealth and all thirsting for diamonds. This new demand outpaces supply, strengthens prices and changes the type of goods that the market is willing to accept.

*All prices include buyer’s premium.