What to expect if you’re looking to invest on pink diamonds.
Pink diamonds perfectly capture the luxury and beauty that coloured diamonds have to offer. Not only are they valuable additions to your collection, they are also a great investment opportunity.
The Fancy Colour Research Foundation (FCRF) has performed a long-term price analysis for coloured diamonds since 2005. They found that pink diamond prices drastically increased over the past ten years – approximately by 116%. So, what makes pink diamonds special and valuable? Read on and find out.
Its source is limited.
The Argyle mine is the source of 90% of the pink diamonds being marketed worldwide every year. Located in the Kimberley region of Western Australia, the biggest diamond mining company, Rio Tinto, owns it.
Argyle mine faced issues in sourcing pink diamonds as that it was producing only 40 to 50 carats every year. Its operations were about to stop this year because of the dwindling supply. As a result, one can project that the price of the already expensive pink diamonds could increase further.
To give a clear picture of the scarcity of pink diamonds, think about this: approximately 14 million carats of diamonds get mined, polished, and sold every year. Of this, about 0.01% are fancy-coloured diamonds, and of the 0.01%, only 0.0001% are pink diamonds.
Producing it is more complicated.
Diamonds typically come in white, brown or yellow colours. Producing diamonds involves a complex process. Intense pressure and heat modify trapped chunks of carbon to produce a glass-like diamond.
The diamond crystals become subjected to more intense pressure and heat that transform them into grain-like wood. The grains are so tightly compressed that only pink light can penetrate and shine from the diamond.
The pricing of pink diamonds is based on rarity.
The basic concept of pricing natural diamonds is that the rarer the item, the higher its value is. It does not matter whether it is fancy-coloured or colourless. There is no linear scale since each diamond contains its own distinctive features.
The Six Main Parameters that Affect the Price of Pink Diamonds
When looking to invest in these rare pieces, take into consideration the following:
The origin is the primary and most obvious parameter. Is it natural or created from a laboratory? Companies already found a way to use technology to produce a pink tint in colourless natural diamonds. They try to recreate the high pressure and heat process that will result in pink colour.
Natural pink diamonds are much more valuable as compared to their artificial counterparts. Those without proper experience and equipment will not be able to determine which is which. Make sure that the diamond you purchase always comes with a certificate from a premier gemmological institute.
The exact colour of the diamond needs to be evaluated by a gemmological institute. There are three attributes utilised to check the colour grading:
It refers to the diamond’s dominant colour. There are times when there are modifying tints or colours that affect hue. For instance, a diamond may have a purplish ting with its pink hue.
It refers to the purity or strength of the hue. The hue saturation of pink diamonds may vary from light pink to vivid.
The amount of darkness or lightness in a diamond may vary from light to dark.
The rare and valuable pieces are the ones that are most vivid, deep and powerful. A fancy deep pink colour is more expensive than faint pink.
Pure pink diamonds without a secondary hue are quite rare. However, a rare secondary hue such as violet can also make a piece quite expensive. An ordinary secondary hue such as brown decreases the value of the diamond. The purplish-pink diamond is considered as the most expensive of its kind.
Carat pertains to the diamond’s weight. A 1-carat diamond weighs 0.2 grams, while a 5-carat diamond weighs 1 gram. Heavier diamonds are rarer.
Clarity pertains to the quality of the diamond’s reflection or shine. It may also represent the amount of external or internal defects. However, its effect on pricing is not that significant as compared to the first three attributes.
The polisher of the diamond should be able to accentuate the diamond’s rarest and most valuable qualities. If the cut meets the following criteria, you know that the polisher did its job:
- Accentuate and deepen the diamond’s colour
- The diamond appears bigger than its real weight
- The polish is shiny, and the diamond appears dazzling and sparkling
The shape pertains to the general form of the diamond as seen from above. It is considered as a separate parameter from the diamond’s cut. The shape affects the manner in which light is reflected and highlights the diamond’s colour.
That means that a round shape commonly used in a white diamond is not suitable for fancy-coloured diamonds. The shape tends to brighten the colour while the goal is the opposite.
The most sought after shapes for pink diamonds are pear and oval. Many also prefer a heart-shaped diamond for romantic reasons. Meanwhile, radiant and cushion shape can further enhance the diamond’s qualities.
Projected investment growth for pink diamonds
Argyle pink diamonds have an average investment growth of 15%. There are cases where it could shoot up to 20%. It is important to emphasise that because of their high value and rarity, prices increase every month. The prices have never gone down in the last 15 years, and experts believe they probably never will.
Invest in pink diamonds with Argyle Diamond Investments
There’s no other better time to invest in pink diamonds than right now. With a dwindling supply and an exponential increase in prices seen over the years, you can’t go wrong. If you’ve already decided to get your own pink diamonds, seek the help of a reliable company. Contact our team at Argyle Diamond Investments, and let’s discuss your options today.