Fancy Diamonds Are Asian Women’s (And Men’s) Best Friend, Driving 40% of Global Value
In Asia these days, diamonds are more than just a girl’s best friend. Men appreciate them, too, and many couples will walk away from jewelry stores wearing his and her diamond engagement rings – frequently featuring fancy colored stones, in a suitably masculine color for him. In fact, a DeBeers survey found that 67 percent of Chinese men between 30 and 44 want to have diamonds.
Colored Diamonds
Rising wealth and the Westernization of Asia, particularly in China, Hong Kong and Taiwan, are driving the ongoing boom in the diamond market. Colored diamonds, in particular, are very hot, and buyers appreciate them as much for their beauty in a piece of jewelry as they do for the way they hold their value.
From 2006 through 2014, fancy colored diamonds – think pink, yellow and blue – have appreciated by nearly 155 percent, more than twice the gains of the better known colorless white diamond. The Fancy Color Research Foundation (FCRF), which tracks diamond values, also notes that today China and Hong Kong account for some 40 percent of colored diamond sales.
According to the FCRF’s research director Tracey Greenstein, “It’s the Asian customers who have driven the increases in colored diamond prices,” particularly for the exceedingly rare pink diamonds. In fact, in early April, it was a Hong Kong jewelry firm, Chow Tai Fook, that placed the winning bid for the exceedingly rare Pink Star diamond for a record-breaking $71.2 million.
As much as an investment, those his and hers diamond engagement rings, colored and not, are benefitting the market as well. Luxury jeweler Tiffany, for example, has had a concerted and profitable strategy to focus on brides (and grooms) in China. It’s been a smart move, analyst Ike Boruchow, now with Wells Fargo, has said: There’s nowhere to go but up as China’s marriage rate is growing and Westernization has made diamond rings a must-have among newly engaged couples.
And as another reflection of the powerful Asian market, some of the most exciting auctions of fancy colored diamonds are being held in Hong Kong. Sotheby’s auction of the Pink Star diamond in April, for example? It was held in Hong Kong.
The Asian market aside, investors’ love affair with diamonds, and particularly fancy colored stones, continues unabated on a global basis as 2017 progresses. The FCRF’s Fancy Color Diamond Index showed pricing stability during the first quarter, although intense blue diamonds continued their 2016 trends with a 1.9 percent increase.
These are trends that Paragon International Wealth Management has been monitoring, according to Michael King, Director of Trading. Toronto’s Paragon International Wealth Management is a leader in acquiring and managing hard investment assets, with a specialty in fancy colored diamonds, particularly pink colored diamonds.
“We are seeing continued demand for the more intense and vivid colored diamonds, and as the blues in this category continue to be challenging to find, the prices will continue to outpace other color diamond categories,” King added.
As the year progresses, King said, the pinks are also likely to rise in price. As he pointed out, as the amount of wealth created in the global economy continues to escalate, investors will remain willing to pay for what is, all told, one of the safest haven investments there is.
