Natural colored diamonds are recognized as the most concentrated form of wealth in the world. Millions of dollars can fit into the palm of your hand or on your finger, making them very attractive for privacy, storage and insurance purposes.
For every 10,000 carats of diamonds mined, it is said only one carat will be a fancy colored diamond of any nature. The more rare colors occur at 100,000 or even 1,000,000 to one.
Since 2007, global diamond production has declined almost 30% before gradually rising by around 2% per year over the last couple of years. This number is deemed far short of the demand increases during that time period. There are fewer stones available for an increasing number of buyers which continues to put upward pressure on prices at the auction, retail and dealer level.
Dramatic production declines have occurred in the Southern Hemisphere, in places like South Africa and Australia, where rare colored diamonds are sourced, which has put even more pressure on the long-term supply of colored diamonds. This trend seems likely to continue over the next decade.
Bain & Co., a consultancy firm, in association with Antwerp’s World Diamond Centre (AWDC), estimates that although supply is estimated to grow by only 2% annually over the next decade, demand is expected to grow by over 5% yearly, meaning prices at every level of the supply chain are expected to rise.
While all colored diamonds are rare, it is important to understand the differences in rarity to consider which color categories are the most suitable for you. This needs to be balanced with the commercial interest at the retail, auction and dealer level as well as individual tastes to determine which of the colors and grades are the most suitable for each individual.
The following table is an indication of levels of rarity in the market: