Demand for natural blue diamonds remain strong in Q3 2016

This photo taken on May 12, 2016 in Geneva during a press preview by Christies's auction house shows the 'Oppenheimer Blue,' a rare fancy vivid blue diamond weighing 14.62 carat.


The Blue Oppenheimer will be auctioned in Geneva on May 18 with a pre-sale estimate of $38-45 million and could become the most expensive cut diamond in the world, according to the house Christies. / AFP / FABRICE COFFRINI        (Photo credit should read FABRICE COFFRINI/AFP/Getty Images)

Analysis of wholesale pricing data, conducted by the Fancy Color Research Foundation (FCRF), reveals that fancy colour diamond prices continued to climb moderately during Q3 2016, at a rate similar to Q2.

For over a year, transactional data testifies to two opposite pricing trends in fancy color diamonds: consistent demand-driven price increases for pink and more notably blue diamonds, partially offset by continued price declines in lower-cost, commercial yellow diamonds.

Prices of blue and pink diamonds increased 1.2% and 0.5%, respectively, in the third quarter. Prices of yellow diamonds have declined by 0.1%, more than during the second quarter of the year.

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Overall, prices in the fancy color diamond category climbed by 0.4% for the period. During the same period, prices of white diamonds continued sliding, a multi-year trend by now.

According to RAPI™, white diamonds declined by 4.3% between January and October 2016, with significant declines during October (including 2.3% for 1 carat diamonds).

The strongest price performers during Q3 2016 were the fancy vivid blue and fancy pink categories across all carat sizes, appreciating by 6.7% and 3.1%, respectively. On the other side, price declines of between 1-3% were reported for all yellow categories, including fancy, intense and vivid. However, trader interviews reveal that certain intense and vivid yellow diamond shapes such as rounds, pears and emeralds, did not experience price declines.

For the 12 months ending October 2016, the Fancy Color Diamond Index appreciated by 0.9%, driven by price increases for blue and pink diamonds of 3.2% and 1.7%, respectively, and offset by a 1.6% decline in prices of yellow diamonds.

FCRF advisory board member, Ephraim Zion, comments: “High quality, rare fancy colour diamonds, especially vivid blues and vivid pinks, have continuously demonstrated their price resilience, as their supply is very limited, effectively neutralizing the effect of economic conditions on consumer demand.

“On a positive note, it seems that prices for yellows are beginning to stabilize as inventories in the U.S. are running low, after a long period of sluggish demand.”

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