The popularity and price of fancy colored diamonds have been on the rise globally, driven by Asian investors.
From 2006 to 2014, fancy colored diamonds (pink, yellow, and blue diamonds) experienced an average total appreciation of 154.7%, according to the Fancy Color Research Foundation (FCRF), a non-profit colored diamond index that was established last year. In the same time period, the colorless, white diamond increased by 62.4%, according to the Diamond Prices Index.
China and Hong Kong now represent approximately 40% of sales of the fancy colored diamond market, according to FCRF. “Most increases in fancy colored diamond prices, particularly for pink diamonds, is driven by Asian customers,” says Tracey Greenstein, director of research at FCRF.
The high demand and extreme rarity of the colored diamond are what keep pushing up its price: It’s formed when a non-carbon element—such as nitrogen and hydrogen— is accidentally trapped during the crystallization process of the diamond. The foreign element is what renders the diamond colorful.
Outside of Asia, colored diamonds are often considered assets with highly attractive investment potential whereas colorless diamonds are more suitable for gifting. But in Asia, they are seen as both.
“A lot of men liked colored diamonds in China,” says Alvarado. “With white diamonds they might think it looks girly or flashy but with colored diamonds, they can choose some of the more masculine colors.”