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For diamonds, the rarer the better and any color pink

FANCY colored diamonds are all the rage these days. A rare, pear-shaped yellow diamond, weighing in at 110.03 carats, approximately the size of a woman's thumb, is being displayed at London's Natural History Museum. Its price tag cannot be calculated.

In December, a 6.89-carat pink diamond was knocked down for US$1 million per carat at Christie's New York Jewels Auction. Another very rare pink diamond was sold at Sotheby's in Geneva for a record-breaking US$46 million last November.

Lately it seems the world can't get enough of pink diamonds. We've seen new heights achieved for colored diamonds at auction, with ever-increasing collector demand for investment-quality gems.

Analysts even predict that demand will outstrip supply for the next decade as emerging economies in the Middle East and Asia try to meet burgeoning consumer interest.

Elite Gems, a Mayfair-based colored diamond investment specialist, sold a magnificent 10.88 carat Marquise Cut Diamond to a prominent Asian collector in November, showing the growing demand among Asian buyers, including wealthy Chinese.

Elite Gems recently showcased a small selection of its colored diamonds at Kee Club Shanghai, drawing a group of VIPs and potential local buyers. The small pile of twinkling gems was worth 9.2 million yuan.

CEO Ansar Ali's aim with Elite Gems is to educate clients in the gems' investment potential. "There's more to diamonds than meets the eye," he said. "They are the ultimate fashion statement and a 'rock'-solid investment."

What makes colored diamonds so rare?

Rare, natural, fancy colored diamonds are found in almost every shade imaginable and each stone produced is considered "one of a kind." It's so rare in fact, that roughly only one diamond in 100,000 possesses this natural color.

What determines the value of a natural color diamond?

Prices of natural colored diamonds are determined by international auction sales (Christie's, Sotheby's) and the market. The prices of rough colored diamonds are going crazy at the moment ... so the price of polished diamonds will probably follow soon. Another criterion of value is the diamond itself: its life, its fire, and the saturation of color, as every diamond is unique due to the amount of color atoms present in its structure.

What makes them, especially fancy colored varieties, attractive as long term investments?

The colorless diamond is essentially a supply driven market, with De Beers in the driving seat. The market in naturally colored diamonds is demand driven. With demand for colored diamonds continuing to grow and the gems becoming very scarce, experts predict colored diamond prices will continue to increase significantly.

What parameters must be considered when investing in diamonds?

If you have the money, diamonds are worthwhile investments, provided the diamonds you invest in are rare enough. Factors that influence the price of a colored diamond include the color intensity and saturation, the rarity of the diamond's color or weight, the presence or absence of a second color, the cut shape, the weight in carat and the degree of clarity.

What is the most desired color worldwide?

Some of today's most popular colored diamonds are the purplish-pink and pink diamonds from the Argyle mine in Australia, which accounts for over 90 percent of the world's pink diamond supply. However, less than 0.1 percent of the mine's output are rare pink diamonds. Mining company Rio Tinto has announced that it will shut down all open-pit operations at Argyle and convert the facility into an underground mine. This is expected to last until 2018 when the mine will completely close its operation. The supply will drop by at least 40 percent then.


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