Colored diamonds are formed when foreign particle like hydrogen, boron or nitrogen gets trapped inside the diamond lattice during crystallization process. Diamonds can also get their color from changes in the electron structure from natural radiation and higher pressure during their formation process.
According to GIA, the probability of occurrence of a colored diamond is 1/10,000. This rarity and increasing demand attribute to the steep price of colored diamonds. Fancy Color Research Foundation (FCRF) – an index for colored diamonds – estimates that fancy color diamonds (pink, yellow and blue diamonds) enjoyed an appreciation of 154.7% from 2006 to 2014. In comparison, value of white (colorless) diamonds appreciated only by 62.4% during the same period. The Bonhams London fine jewelry sales that took place recently also established the increasing demand for colored diamonds.
In case of colorless and near-colorless diamonds in GIA’s D to Z range, value decreases with intensity of colors present. On the other hand, value of colored diamonds increases with the strength, purity and rarity of color. Red, green, purple and orange are the rarest, while yellow and brown are the most common fancy colors. Red diamonds are so rare that there are only six mined red diamonds in the market.
Demand for colored diamonds has been skewed towards Asian markets especially China and Hong Kong. Both of them jointly represent 40% of colored diamond sales, according to FCRF. Natural Color Diamond Association says major auction houses have shifted their colored diamond sales from Geneva and New York to Hong Kong. Edward Alvarado – director of Diamintel – says “A lot of men liked colored diamonds in China. With white diamonds they might think it looks girly or flashy but with colored diamonds, they can choose some of the more masculine colors.”
The value of colored diamonds has never decreased in the past 30 years. Apart from enhancing jewelry, colored diamonds could also serve as an attractive investment option.