Marylebone jeweller Alexander Davis sees continuing strength in market for rare gems
Prices of extraordinarily rare natural colour gemstones are likely to go higher as the number of High Net Worth individuals increases, says Duke Street-based jeweller Alexander Davis who attended the November 11 Sotheby’s auction in Geneva in which the 12.03-carat “Blue Moon” diamond sold for a record price for a gemstone at auction of $48.4 million.
Q. Alexander, you attended the Sotheby’s Geneva sale of the Blue Moon diamond to a Hong Kong buyer for a world record price. Why do extraordinary gems achieve such extraordinary prices?
A. There are more High Net Worth individuals (HNWs) than ever before, and they are looking for opportunities to invest. With bank interest rates so low they are seeking alternative investments, and items that are extremely rare are a natural choice. Often gemstones are part of a diverse portfolio of investments that can also include property and art. There can also be an aspect of prestige to their investment choices. They have the money available and want to be seen to be spending the most, be it on gemstones or on yachts and jets.
Q. Do you see risks that the market for extraordinary gemstones can at some point correct lower?
A. These rare gemstones are a depleting resource, so the overall market trend is likely to track upwards, but with such a small number of buyers at the very top of the market (potentially only five people in the world were in line to buy the “Blue Moon”), it can be fickle and depend on their mood on the day of the auction. Sentiment plays a big part at the top of the market, but currently colour stones are the hot thing to invest in.
Q. Do you sense that there is an increasing concentration of buyers of top tier diamonds who are based in the Far East?
A. In the Far East, amassing extreme wealth is a far more celebrated achievement than in the West, and HNWs display their wealth with pride. There is the matter of “keeping up with the Joneses” and buyers show off their magnificent jewels to their friends and competitors. There are more and more HNWs emerging from the Far East and they are taking an increasingly sophisticated approach to buying. They are very well informed and discerning about their investments.