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About coloured diamonds

Diamonds were first excavated in India approximately 3,000 years ago and were originally appreciated for their ability to reflect and refract light. Traders eventually brought these gemstones to other parts of the world, but it wasn’t until the 1300s – when craftsmen learned how to best cut diamonds – did their popularity and usage in jewelry and other adornments take off. Almost immediately, diamonds became an obsession of the rich and powerful.

From crown jewels to rumored pirate treasure, diamonds created fortunes, fueled imaginations, forged alliances, and changed history. The wealthy have long understood the value and power of diamonds (and coloured diamonds in particular) and have likely benefited from the misnomer that diamonds are for the elite only. We’re happy to work with clients of different backgrounds to actualize their dreams by unveiling to them the accessibility of the diamond market.

Today’s coloured diamond market is relatively niche, but is becoming increasingly recognized for its investment and wealth potential. It’s estimated that coloured diamonds make up only one to two percent of the entire natural diamond market. Their rarity and beauty are big reasons why these gemstones command higher prices and have long been sought after and collected by royals, celebrities, and the wealthiest among us.

Timeless treasures

Not only are diamonds the hardest material found on earth, it’s estimated that the coloured diamonds in circulation today were formed between one and three billion years ago. There’s likely no other way you could ever own something so near eternal.

With careful planning, know-how, and the help of trusted gemstone dealers, everyday Canadians can also access this market and experience the privilege of owning natural coloured diamonds – and even build generational wealth through those acquisitions. Similar to bullion, a coloured diamond is an asset that exists outside the stock and financial market systems, and as such, can add diversity and hedging within your portfolio or wealth plan.

Factors that influence the value of a coloured diamond

Each natural coloured diamond is one-of-a-kind, and its value is determined on an individual basis. That said, there are several factors that weigh into the price of a coloured diamond.

  • Colour rarity. Coloured diamonds are far rarer than white diamonds, and among coloured diamonds, certain colours are incredibly scarce. Red, purple, blue, pink, green, orange, and yellow diamonds are especially coveted because of their rarity.
  • Colour intensity. The hue, saturation, and tone all factor into the intensity of the diamond’s colour – and the more intense and visually striking a diamond is, the higher the price.
  • Carat (weight). The size of a diamond is gauged by weight, which is measured in carats. Larger diamonds are generally valued higher than smaller ones of comparative colour.
  • Cut. A well-cut diamond is one that is considered to have good symmetry and proportion, all of which show off its sparkle and brilliance. Preferences for different shapes (such as oval, round, square, pear, etc.) tend to be based on the buyer’s personal taste, especially if they intend to wear the diamond in a jewelry setting.
  • Clarity. Diamonds with few inclusions and blemishes, frequently referred to as “flawless”, will typically fetch a higher price.
  • Certification. The authenticity and characteristics of your diamond should be confirmed in writing by an expert – not just so you know what you’re getting, but so that an eventual sale of a diamond can be easier. Diamonds sold through Guildhall include certification recognized by the leading industry authority, the Gemological Institute of America (GIA).
  • Historical connections. Diamonds and jewelry that come with a story of their origin and ownership, especially those connected to historical importance, tend to captivate buyers.
  • Demand. The popularity and demand for certain coloured diamonds changes over time and can be influenced by a number of factors. For example, gemologists and dealers saw a notable uptick in demand for pink diamonds after Jennifer Lopez received one as an engagement ring.

Wealth you can wear: Loose diamonds vs. diamonds in a jewelry setting

Guildhall provides our clients with the opportunity to purchase cut loose diamonds, diamonds already in jewelry settings, and jewelry services where we can design bespoke pieces that incorporate your loose diamonds. The decision to purchase or place a coloured diamond in a jewelry setting is a personal one. Some factors worth considering include:

  • Beauty and fashion: The aesthetic attraction of diamonds is nearly universal. For decades, red carpets have featured stunning examples of beautifully crafted earrings, necklaces, rings, and bracelets featuring rare coloured diamonds. These brilliant pieces often draw just as much attention as the celebrity wearing them.
  • Luxury on display: Some clients love the extravagance and status that is symbolized by wearing ones’ diamonds in public or at a special event. It’s a privilege that few people get to experience, and a part of a client’s enjoyment of this unique investment.
  • Added value: Skilled jewelers are able to elevate a diamond into a work of art thanks to the special details, additional gems, and precious metals used to create a piece of jewelry. Not only does this add interest, it can raise the total value of piece.
  • Sentimentality: Once placed in a jewelry setting, some of our clients consider the piece to be a family heirloom, which gives it an extra personal meaning.
  • Transparency: Some buyers prefer loose diamonds because you can get a complete 360-degree view of the diamond, and can confirm its characteristics and quality.
  • Taxation: Jewelry and loose diamonds are considered different kinds of assets, and, as such, have different tax implications related to their sale or gifting. For more information about this, we recommend speaking with an accountant.
  • Insurance needs: Because jewelry and loose diamonds are categorized differently in terms of asset type – and if a jewelry piece is sometimes worn in public – your insurance implications and coverage needs may be different. For more information about this, we recommend speaking with an insurance provider.

Purchasing and Selling Section

Purchasing and selling coloured diamonds

Similar to bullion, coloured diamonds are the kind of purchase that’s best capitalized with a long-term view. While prices are steadily rising, the gains are most likely to be seen when one takes a patient approach. Between taxes and broker commissions, it rarely makes financial sense to “flip” a diamond purchase quickly. Undoubtedly, this is not how wealthy diamond collectors made their fortunes.

The entrance into the coloured diamond market is typically higher than most financial products, but with careful planning, our clients have been able to access this exciting opportunity. Guildhall’s team can walk you through each step of finding and purchasing a coloured diamond that’s right for you.

We strongly advise anyone interested in buying or selling a coloured diamond to go through expert channels, such as working with a diamond dealer who has received training from the Gemological Institute of America (GIA) and holds a membership in the Fancy Color Research Foundation (FCRF), as this can greatly reduce the risk of fraud, forgery, or unfair sales prices.

Once someone has made this thrilling investment, it’s common for clients to want to hold onto their coloured diamond, as this one-of-a-kind treasure gains both sentimental and financial value. In fact, many decide they want to keep the coloured diamond in the family and arrange to include it as part of their children’s or loved ones’ inheritance. In some cases, a coloured diamond purchase lays the foundation for generational wealth.

However, should the need or opportunity to sell a coloured diamond arise – sometimes to trade up to a larger coloured diamond purchase – Guildhall’s team can be of service to broker that sale.

An investment that stands the test of time: Historical performance of coloured diamonds

Since record-keeping began more than forty years ago, auction values have rapidly increased alongside growing scarcity. Natural coloured diamonds are a lasting global phenomenon with demonstrated market performance in a changing world.

[Insert chart of coloured diamond values vs. Dow Jones vs. white diamonds]

Diamonds are a long-term investment to be cherished and passed down through generations. Guildhall recognizes the value – both financial and sentimental – of your coloured diamonds, and we can advise on the best ways to store and care for your assets.

All Guildhall diamonds are accompanied by a full GIA grading report and an independent appraisal for insurance purposes, which details fair market replacement values should your diamond ever be stolen or lost.

As a proud member of the FCRF and with staff trained by the GIA, Guildhall provides our clients with experienced and expert advice and services. Learn more about The Guildhall Strategy of “Elevate”, in which we work with clients to enter the coloured diamond markets and build generational wealth, or contact our team directly.

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