Unlike their colorless counterparts, fancy-colored diamonds arise as uncommon wonders, displaying a myriad of distinct hues. Through the natural introduction of trace elements during their formation, these gemstones attain individualistic colors, bestowing upon each stone a singular identity. Encompassing a stunning range — from the vivid blues exemplified by the Hope Diamond to the profound pinks characterizing Argyle diamonds — their rarity positions them at the pinnacle of opulence, commanding prices that exceed those of colorless white diamonds. Used in high jewellery such as engagement rings and pendants since ages – coloured diamonds truly are tangible pieces of luxury.
The surge in demand for these gemstones arises from their rarity, captivating colors, and potential for investment appreciation. Colored diamonds, cherished for their intrinsic beauty and enduring value, establish themselves as coveted treasures sought after by discerning enthusiasts worldwide. In this blog, we cover everything you need to know about coloured diamonds – including details about their formation, colour spectrum, and rarity, and quality factors.
Fancy coloured diamonds are among the most expensive in all of gemmology
Formation of Colored Diamonds
Colored diamonds form through natural geological processes introducing trace elements or structural changes. This journey occurs beneath the Earth's crust, subjecting carbon atoms to extreme heat and pressure for 900 million to 3.2 billion years. These geological forces shape each diamond's distinct characteristics, contributing to their rarity.
White diamonds – whether inclined towards yellow or brown diamond shades, derive their colours due to nitrogen. Fancy-colored diamonds, on the other hand, derive their unique hues through the presence of trace elements and certain structural anomalies during their formation process. Unlike colorless diamonds, which consist mostly of carbon atoms arranged in a crystal lattice, fancy-colored diamonds incorporate additional elements or undergo specific conditions that result in diverse colors. Some factors that cause the formation of colours in a diamond are:
- Trace Elements: Trace elements are responsible for producing colour in diamonds. Some important ones include Boron - which produces blue colours; Nitrogen - which produces yellow and brown colours; Hydrogen - which is associated with violet tones; and natural radiation which can produce green diamonds.
- Crystal Distortions: Structural irregularities in the crystal lattice can lead to coloration. For example, plastic deformation during crystal growth may cause pink or red hues.
- Pressure & Temperature: Extreme conditions during diamond formation can influence color. High pressure and temperature can lead to the development of various colors.
Understanding the intricate interplay of these factors is crucial in appreciating the exceptional diversity of fancy colored diamonds. The geological processes that give rise to these unique gemstones contribute to their rarity and, consequently, their esteemed value in the world of gemmology.
Grading Scale of Colored Diamonds
Coloured diamonds are classified uniquely, deviating from the conventional D-to-Z colour scale of white diamonds. The GIA utilizes a specialized method for assessing fancy-coloured diamonds, prioritizing the intensity of their hues. This classification is vital for comprehending and appreciating the diverse colors these diamonds can display.
Unlike white diamonds, which span from D (colorless) to Z (light yellow or brown), colored diamonds adhere to a scale emphasizing escalating color intensity. This spectrum comprises grades of Faint, Very Light, Light, Fancy Light, Fancy, Fancy Intense, Fancy Vivid, Fancy Dark, and Fancy Deep. Each category signifies a varying level of intensity in the diamond's color, with Fancy Vivid and Fancy Deep often understood to be the most vibrant and sought-after hues.
The colour grading of fancy coloured diamonds ranges from Faint to Fancy Vivid & Fancy Deep (Source: GIA)
The color intensity plays a pivotal role in determining the value of a colored diamond. Exceptional specimens like blue and pink diamonds, situated at the pinnacle of the coloured diamond spectrum, command high prices and are notoriously challenging to acquire. Within these categories, distinctions like Fancy Light Blue versus Fancy Vivid Blue or Fancy Light Pink versus Fancy Intense Pink significantly influence the diamond's market value.
Notable Colored Diamond Varieties
- Pink Diamonds: Pink diamonds, unlike others, derive their pink hue not from trace elements but from internal structural distortions, found in approximately 99.5% of these diamonds. Nitrogen-infused pink stones exhibit distinct visible patterns like narrow bands or graining under magnification, concentrating the pink color within the gem. Historically, the Kollur mine in India, particularly in the Guntur district of Andhra Pradesh, is significant as it yielded one of the oldest pink diamonds ever discovered. In contemporary times, the majority of pink diamonds, approximately 80%, are sourced from the Argyle mine in Kimberley, Western Australia.
- Blue Diamonds: Blue diamonds, exceptionally rare and valuable, are formed at extreme depths, around 4 times deeper than most diamonds. As revealed by recent research, their unique color is linked to boron, an element found in the ancient ocean floors. Blue diamonds, like the famous Hope diamond, have long fascinated scientists due to their scarcity and high value. Examining mineral inclusions in these diamonds indicates they formed deep within the Earth's mantle, likely alongside ancient oceanic plates that were subducted. Boron, linked to their blue hue, may have come from ancient sea beds, carried deep by plate tectonics. This study not only clarifies blue diamond origins but also enriches our knowledge of Earth's geological mechanisms, such as mantle chemistry and plate tectonics.
- Yellow Diamonds: The natural yellow color of a diamond comes from the infusion of trace elements of nitrogen during its formation. The intensity of the yellow color is influenced by the nature of impurities and their impact on the diamond's light absorption. Diamonds with a large even-numbered group of nitrogen atoms exhibit a yellow to brown tint. On the other hand, if unpaired nitrogen atoms are spread throughout the crystal, the diamond will display an intense yellow or, occasionally, a brown tint, as seen in the rare and highly valued "canary" diamonds.
- Green Diamonds: Many green diamonds feature a surface layer of color, typically found in a thin layer on the rough stone. Preserving this original color requires careful planning and execution in the design and cut of the polished diamond. These diamonds often display a subtle green tone, occasionally influenced by yellow, blue, or grey hints.
- Red Diamonds: A red diamond is exceptionally rare and valuable, with only 20 to 30 gem-quality red diamonds existing worldwide. They consist of pure carbon, and their unique red color arises from a rare deformation in the atomic structure.
Red diamonds are the rarest of all coloured diamonds. Pictured here is the Moussaieff Red Diamond - the largest red diamond in existence, weighing in at 5.11 carats.
- Orange Diamonds: The primary source of the orange color in diamonds is the presence of nitrogen, much like in yellow diamonds. The distinction between orange and yellow diamonds lies in how nitrogen atoms are arranged during the diamond's formation. This specific arrangement, termed hyper-specific, absorbs hints of blue and yellow light, resulting in an orange color.
Investment Potential of Fancy Coloured Diamonds
The most expensive coloured diamonds, including pink, purple, green, blue, violet, and pure or "pumpkin" orange diamonds, significantly surpass the value of colorless diamonds. Their price rises exponentially with higher carat weights and more intense colors.
These diamonds are highly valuable, with base valuations starting in the tens of thousands of dollars per carat. At auctions, loose diamonds of these rare colors often fetch bids in the millions of dollars. Due to their rareness and high demand, these coloured diamonds are considered secure investments, promising exceptional returns. Some notable high-profile purchases of the world's rarest and most expensive coloured diamonds include:
- The CTF Pink Star: A 59.60 carat, $71.2 million, record-breaking vivid-pink diamond auctioned in Hong Kong (2017).
- The Oppenheimer Blue: 14.62 carat, $57.5 million, record-setting fancy vivid-blue diamond at Christie's (2016).
- The Winston Pink Legacy : 18.96 carat, $50.3 million, Oppenheimer family's pink diamond was renamed after Christie's auction (2018).
From left to right - the CTF Pink Star, The Oppenheimer Blue, & the Winston Pink Legacy
The ongoing macroeconomic challenges have caused a dip in the demand for natural white diamonds. In 2023, natural white diamond prices have sharply fallen, estimated at around a 35% decline for certain grades. This decline is attributed to several factors - the rise of affordable lab-grown diamonds, shifts in macroeconomic conditions, and reduced demand for natural diamonds in engagement rings.
On the contrary, coloured diamonds historically not only retained wealth but also amplified it. Between January 2008 and January 2010 – during the global financial crisis, pink and blue diamond prices appreciated by 18% and 10%, respectively, while traditional indices like S&P 500 and NASDAQ plunged. Further, the average price of all fancy-color diamonds ended 2022 3.9% higher than the previous 12 months. Specifically, yellow diamonds rose 4.6%, pinks climbed 3.9%, and blues rose 1.8%. This surge in colored diamond prices is due to various factors - increased demand in emerging markets, recognition as a valuable addition to investment portfolios, and as symbols of rarity, leading to interest from collectors, enthusiasts, and HNIs.
Buying Colored Diamonds
For potential buyers, considering the 4Cs of diamond quality is crucial:
- Color: Assess the intensity and hue of the diamond's color, favouring vivid and evenly distributed colors. Ideally, a GIA colour grade is considered the gold standard, with the Fancy Vivid grade considered ideal.
- Clarity: Examine the diamond for imperfections or inclusions that might affect its clarity and value. The clarity scale for diamonds ranges from Internally Flawless (IF), with no visible internal flaws under 10x magnification, to Very, Very Slightly Included (VVS1/VVS2) with minute inclusions that are hard to spot, Slightly Included (SI1/SI2) with noticeable inclusions, and Included (I1/I2/I3) with more pronounced inclusions affecting appearance and transparency.
- Cut: Pay attention to the diamond's cut, which influences brilliance and overall beauty. For instance, Triple Excellent diamonds (XXX) often termed "Triple X," receive the highest evaluations in 3 crucial factors — cut, polish, and symmetry.
- Carat Weight: Determine the size of the colored diamond, keeping in mind that larger diamonds are rarer and more expensive.
It is crucial to prioritize transparency and authenticity by requesting a comprehensive grading report or certificate outlining the 4Cs. GIA stands out as the most credible authority in diamond grading, known for its rigorous standards and global recognition. Other reputable laboratories, such as IGI (International Gemological Institute) and AGS (American Gem Society), also provide reliable certifications.
Coloured diamonds offer a unique investment opportunity due to their scarcity, particularly in specific hues. The increasing difficulty in finding sizable coloured diamonds over time enhances their exclusivity, making ownership a testament to Earth's geological history. Beyond their monetary value, owning a colored diamond is unique, classy, and a symbol of natural beauty. These gems go beyond mere possession. They are individual pieces of art, each hue telling a unique story.
