LONDON, December 17, 2008 -- Extraordinarily rare and magnificent diamonds are commanding exceptionally high prices despite the global credit crunch, and this trend is expected to continue even if the economic downturn accelerates in 2009.
International jeweller Laurence Graff paid 16.39 million pounds ($24.3 million) for the Wittelsbach diamond at a Christie’s auction in London on December 10. It was the highest price ever paid for any diamond or piece of jewellery sold at auction.
The price achieved in the highly competitive sale, which featured strong interest from professional jewellers and private collectors, was well above a pre-sale estimate of around 9 million pounds.
The previous record price for a diamond sold at auction was $16.5 million, for a 100-carat diamond sold in Geneva in 1995.
The 35.56-carat, VS2 clarity fancy deep greyish-blue Wittelsbach diamond came to the international market for the first time in almost 80 years.
Just a few weeks before the Wittelsbach diamond sale, at an auction in Geneva in November, Christie’s sold a 42.28-carat Kashmir sapphire ring for a world record price for a sapphire of nearly $3.5 million.
In another strong result recently, at Christie’s New York sale on December 11, a pair of pear-shaped D Flawless diamonds of 17.01 and 17.79 carats, inscribed by Forevermark, sold for a total of $3.55 million – or a solid $102,000 per carat.
A circular-cut E Potentially Flawless diamond of 10.28 carats, by JAR, sold for $1.06 million – or $103,000 per carat.
Bond Street jewellers say that special, very fine gemstones are achieving as strong prices as ever, because people understand and appreciate their rarity.
A DIAMOND’S HISTORY
Provenance also boosts value, as in the case of the historic, 17th century Wittelsbach diamond which had been owned by Spanish and German royalty.
The diamond, which came from an Indian diamond mine, was part of the dowry of the Infanta Margarita Teresa (1651-1673) upon her engagement to Leopold I of Austria (1640-1705).
After the princess's death her husband kept the dowry and the diamond was passed on to his heirs.
In 1722 the diamond entered the Wittelsbach family, on the occasion of the marriage of Archduchess Maria Amalia of Austria (1701-1756) to the Bavarian Crown Prince, Charles Albert (1697-1745), and became a prized family possession.
It was sold from a private collection, where it has been since 1964.
WORLD RECORD PRICE
Jewellers say exceptional diamonds will continue to command sky-high prices despite the gloomy outlook for the world economy.
“It doesn’t come as a surprise,” said Alisa Moussaieff of top fine jeweller Moussaieff, referring to the world record price achieved by the Wittelsbach diamond.
“It’s a fair price,” she added. “It (prices of exceptional diamonds) will go higher and higher.”
Other jewellers supported her view that the most exclusive of jewels and gemstones, especially those with provenance, would buck consumer trends in luxury goods.
Exceptional luxury goods – custom-made or bespoke items ranging from diamonds to limited-edition watches, hand-made crocodile backgammon sets and hand-crafted mobile phones made from precious materials – are defying the economic downturn, because high net-worth customers appreciate exclusivity.
However, for middle-of-the-range diamonds and jewellery, retail markets are proving very challenging before Christmas as the economic downturn bites.
Even fine jewellers in London are seeing patchy trade, and business is likely to remain mixed if economic conditions worsen in 2009.