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Defying Gravity: Have Fancy Color Diamonds Gone Too Far Too Fast?

"Two years ago," a prominent dealer and designer says off-record, "I picked up a few dozen pinks, one to three carats, at a good price. Pretty, but fairly bluffy stones. I thought I'd design with them, but they sold through so effortlessly. Today, if I wanted those same stones back—I wouldn't, because, as I say, they were fairly bluffy stones—they would be more than cost-prohibitive: $30,000 per carat for three carat brownish pinks? I'd be working for an entirely new set of customers, and they certainly wouldn't be getting any deals."

Fancy diamantaires have been echoing similar laments for several years, but 2006 has seen a watershed for fancy prices. "I'll work with yellows," says Christopher Slowinski of Christopher Designs, New York, "but I refuse to become a museum for fancy color diamonds. $750,000 per carat? For what?"

"When you talk about color these days, people get excited, maybe a bit irrational," says Joshua Javaheri of Uneek Diamonds, Los Angeles, long a mainstay for fancy color pieces of exquisite design and temperate prices. "Marketing, marketing. That works for bread and butter goods, for the commodities, and for luxuries. But if you squeeze a relatively small market—and fancies will always be relatively small, because of supply—then you make that market unreal and unmaintainable. We're almost entirely into white goods now."

"I love blue diamonds," says Gregg Ruth of Gregg Ruth & Co., Malibu, California, who's done as much as any designer to sell fancies to Peoria. "But how could I do business with them? Forget supply. I don't have the money for them. I'm trying to find a kind way of putting this, but there really isn't a kind way: I don't like the fancy market these days."

Needless to say, the supply side's picture is a bit rosier. "We are seeing more global demand and reduced production, creating continued pricing pressure on pinks of all size and qualities," says Larry West of L.J. West, New York, a purveyor of exotic pinks, blues, oranges, greens, and reds. "Cleaner, VS2-plus pinks are commanding substantial premiums. Blues are exceedingly rare and the demand certainly exceeds the supply. Dealers are eager for any existing or older stones that make their way to the market, and the supply of fine greens, oranges, and reds is exceedingly small, with savvy dealers and collectors offering significant sums quickly in order to get what they want."

But what about the rest of the world's fancy colors? What are prices now, what colors and shapes are hottest? What are the mark-up ranges? Where are prices heading?

"Yellows are hot, but, maybe, finally slowing down," says Asaf Herskovitz of Philadelphia's G.N. Diamonds. "Pinks are hot, and not slowing down. The asschers and cushions are so hot. Maybe there's too many radiants out there for the moment. As with white goods, the good square fancies are taking the market share away from the princess. A good pear makes its own market." Herskovitz, who works closely with jewelers on price, says that mark-ups are the one constant in the current fancy boom. "Thirty percent, maybe less for the great stones, as much as keystone for the one caraters. The absolute sweet spot, as with the whites, is the two carat VS, any color. If it's pink, forget about it."

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