The Sparkling Allure: Investment Trends in Diamonds and Jewelry in 2023

The Sparkling Allure: Investment Trends in Diamonds and Jewelry in 2023
VAN CLEEF & ARPELS RUBY AND DIAMOND BIRD OF PARADISE BROOCH, Source - Christie's.

Introduction

Diamonds and jewelry have long been more than just adornments; they are symbols of wealth, status, and increasingly, lucrative investments. According to the Knight Frank Wealth Report on Luxury Investments 2023, these "wearable investments" have not only retained their allure but have also seen a 2% to 7% increase in the 12-month price change up to Q2 2023.

Auction Highlights

The first half of 2023 has been nothing short of exceptional for jewelry auctions. Christie's had a record-breaking season, underscoring the robust demand for high-quality pieces. This surge in demand aligns with the AMR Watch Index, which was up 10%, indicating a strong performance for collectible items like watches.

The Rise of Colored Diamonds

Colored diamonds are increasingly becoming the investor's best friend. Pink diamonds have seen the strongest price growth over the long term. However, yellow diamonds have been rising in popularity over the past 12 months, according to the latest data from the Fancy Color Research Foundation (FCRF). The FCRF index, compiled quarterly, tracks size and intensity for pink, blue, and yellow diamonds, providing a comprehensive view of the market.

Iconic Pieces Make Their Mark

One of the standout sales of 2023 was a ruby and diamond 'bird of paradise' brooch by Van Cleef & Arpels. The piece sold for 453,000 Swiss francs in Geneva in May 2023, marking a 40% increase compared to its sale price in 2018. This sale exemplifies the high returns that iconic pieces can offer to savvy investors.

The Shift to Fancy Colors

The market is witnessing a significant shift from colorless to fancy color diamonds. Wholesalers, in search of safer investment avenues, are increasingly diversifying their inventory to include more fancy color diamonds. This trend is not just a fad; it's backed by data indicating a significant increase in the success rate of fancy color sales.

Long-Term Investment Viability

According to the KFLII 10-Year Indexed Performance, colored diamonds showed a 5% performance, indicating long-term stability and growth in this sector. This data point adds another layer of credibility to colored diamonds as a stable and growing investment avenue.

Conclusion

The diamond and jewelry market is evolving rapidly, driven by shifts in consumer preferences and investment strategies. With significant growth in both demand and prices, especially for colored and fancy diamonds, this market offers a sparkling opportunity for those willing to do their homework. As we move further into 2023, these trends are likely to gain momentum, shaping the future of the diamond and jewelry investment landscape.

Sources

Knight Frank (2023), The Wealth Report Luxury Investments 2023.  https://content.knightfrank.com/resources/knightfrank.com/wealthreport/2023/the-wealth-report-luxury-investments-2023.pdf

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