Monthly Archives: April 2023

GIA Researchers Dive Deep into their Crystal Structure

Natural pink diamonds are among the most valuable and rare of Earth’s treasures. Top, vivid-colored stones can bring more than $2 million per carat at major auctions. Such prices come from their rarity as much as their beauty – only a tiny percentage of diamonds have pink color, and only a tiny percentage of these have a rich, vivid color.

Pink diamonds created in a laboratory, however, are quite different from most of their natural counterparts. Manufacturers can’t replicate the way the vast majority of these fancy colored diamonds formed in nature, according to GIA researchers.

Employing GIA’s immense database of more than 90,000 natural pink and related colored diamonds graded between 2008 and 2016, GIA researchers Dr. Sally Eaton-Magaña, senior research scientist; Troy Ardon, research associate; Dr. Karen V. Smit, research scientist; Dr. Christopher M. Breeding, senior research scientist and Dr. James Shigley, distinguished research fellow, produced the most detailed and comprehensive gemological analysis of pink diamonds to date, published in the Winter 2018 edition of the Institute’s quarterly journal, Gems & Gemology.

The sample set of 90,000-plus diamonds includes all those submitted to GIA from 2008 to 2016 with pink as a primary color, and also spans the color hue range from red to purple and saturation range from faint to dark, along with brown diamonds, which share a similar cause of color as pink and related stones. Many of those 90,000 diamonds were small, with low color saturation.

This research confirms that the color of 99.5% of pink diamonds comes from distortion in their crystal structure, not from trace elements, such as nitrogen, which causes yellow color in diamonds or boron, which causes blue. In pink diamonds containing nitrogen, the color is generally concentrated within parallel narrow bands called glide planes, lamellae, or pink/brown graining, depending upon the color. These lines are visible under a microscope and cutters orient them perpendicular to the table to maximize body color.

While many color-producing defects can be introduced through laboratory treatment processes, atomic level distortions in a diamond’s crystal structure created by plastic deformation cannot.

“We know that plastic deformation is associated with the vast majority of diamonds with these colors, but we still do not know the actual atomic structure of the defect causing the color,” says Breeding, who notes that the pink color is caused by a broad absorption band centered at 550 nanometer (nm) in spectroscopic analysis. Spectroscopic analysis is an important gemological tool to measure the impurities and other defects within a diamond (and other gemstones) that give rise to specific absorption peaks or bands in the visible spectrum. The researchers said that there is no known method of replicating plastic deformation with the 550 nm absorption band by a laboratory treatment or growth process.

All fancy colored diamonds submitted to GIA’s grading laboratories are subjected to rigorous analysis to be certain that the colors ‒ and the diamonds themselves ‒ are of natural origin, which makes the GIA database extensively detailed and valuable for research, Shigley said. He added that the team selected a representative sample of 1,000 pink diamonds to examine even more thoroughly for the Gems & Gemology article.

Size and Color Statistics: Are Pink Diamonds Rare?

Of the group of diamonds in this study 47% were unmodified (no other color observed) pink; 28% were purplish pink to pinkish purple; 17% were brownish pink to pinkish brown; 10% were brownish orangy-pink to orangy-pink; 3% were brown; 1% were purple-brown, purple-gray and purple; and 0.9% were red, brown-red or orange red. Of the unmodified pink diamonds, 54% were graded faint to light pink.

While brown diamonds are among the most common fancy colors in nature, the low percentage of them in this group suggests that most are sold into the market without grading reports. The brown color is accompanied by other hues, such as pink or yellow, or the brown stones are treated to produce other colors.

The vast majority of the group (83%), weighed less than one carat, with 56% of them being under one-half carat. The dominant shapes were round (24%), pear (20%), rectangle (16%) and cushion (13%).

The research ‒ the most extensive ever carried out on pink and associated colored diamonds ‒ found that 25% are type IIa, which is much higher than with colorless to near-colorless diamonds (where the percentage is < 5%), Breeding said.

The majority of type Ia pink diamonds (diamond containing clusters or aggregates of nitrogen atoms as impurities in the crystal lattice) almost exclusively come from two sources: Australia’s Argyle mine and Russia, which also happen to be the most prolific and consistent producers of such stones. Type IIa pink and other type Ia pink diamonds come from other sources – such as Tanzania, South Africa, and Brazil – but there is no reported regular production from any mine.

“It’s unusual that these types are from very specific locales, especially because they are so rarely found in other sources,” Breeding noted, adding that because Argyle is the dominant source for highly saturated (colored) pink, purplish-pink and red diamonds; the decline in the numbers of such stones will be substantial after the mine closes next year.

Research Aids Automated Detection of Treatment/Lab Growns

This pink diamond study enables GIA to better understand how these rare and beautiful diamonds formed and the properties that give them their color. The researchers found many new details at the atomic level by analyzing the absorption spectroscopy and photoluminescence data. These findings add to the understanding of these amazing stones – which can enable faster, more accurate identification.

The research from this study reinforces GIA’s development of an upgrade for the GIA iD100® gem testing device that adds a function to accurately screen pink and related color diamonds for treatments and synthetics.

Elizabeth Taylor once said, “Big girls need big diamonds.”

Dana Auslander agrees. The veteran hedge fund executive is shaking up the investment world, creating a unique new asset class that sits at the intersection of finance and luxury, and gives all women the opportunity to actually own diamonds. Big diamonds.

Launched last year, the all-women founded LUXUS is the first SEC-qualified alternative investment platform that allows any investor to purchase luxury jewels – previously only accessible by the uber wealthy – through fractional ownership.

Making Luxury Accessible to Everyone

Simply put, rather than owning shares of a publicly traded company, LUXUS enables the ordinary investor to now own shares of a publicly traded diamond. Like a rare, 5 carat, D-Flawless Kwiat diamond, for example. Here’s how.

Auslander’s team identifies macro trends (like colored diamonds) in the high-end gem space and partners with brands who may have a valuable gem in inventory or who may be able to procure one directly from a mining company. LUXUS prices the gem and securitizes it, creating a financial instrument that can be split up and sold to investors. The company files with the SEC and “IPOs” the gem, much like a company would IPO. The total value of the gem is divided into shares, which can be purchased by any investor.

For example, the diamond mentioned above is valued at $400,000, but is being offered to the public in the form of 1,600 shares at $250 each. Shares will ultimately be tradable in a secondary market and after a few years the diamond will sell back to the private market – a built-in private equity exit on the back end.

An Attractive New Asset Class

Owning fractional shares of diamonds can be an appealing alternative investment option for the mainstream investor. First, unlike cryptocurrency and NFTs – which SEC Chairman Gary Gensler has described as the “Wild West” and “lacking proper regulatory compliance” – investing in securitized gems is highly regulated. The platform is governed by FINRA and the SEC and all assets have certificates from the Gemological Institute of America and the International Gemological Institute, attesting to quality and valuation.

Second, precious metals, like gold and silver, have long been used as hedges in times of inflation and market volatility. And now diamonds are performing the same role. “Over the past 3 years, large, investment grade diamonds of flawless clarity have significantly outperformed the SPX (the S&P 500 Index) and gold, demonstrating their value as an inflation hedge,” Auslander shared last month during the launch of the company’s third IPO.

And finally … bragging rights! “I want people to be able to say, ‘I own this Tutti Frutti by Cartier from the 1930s or I own this pink diamond from the Argyle Diamond Mine,’” Auslander said. Interestingly, the Argyle Diamond Mine is closed and there will be no more pink diamonds mined from the earth- ever again. Scarcity like this makes owning rare gems, even fractional shares, that much more valuable and desirable.

Capital Markets as a New Sales Channel

Luxury jewelry brands are eager to participate in the securitization and fractional sale of their gems for several reasons. First, it provides a low-risk way for the brands to be perceived as innovative and “tech forward.” Many attempted a foray into the world of NFTs with less than stellar outcomes.

It also allows jewelry brands to reach a much larger audience – effectively using the capital markets as a new sales channel. This is particularly appealing to brands who have been struggling to compete against the larger conglomerates, like Sotheby’s and Christie’s, and to those brands who have felt the sting of the significant decline in Asian tourism. Chinese consumers purchase about one-third of the world’s luxury goods. And while in 2019 almost three million Chinese tourists visited the US, that number sank to less than half a million last year.

What’s Next?

While LUXUS’s first three IPOs were diamonds, Auslander has plans to offer shares of different luxury products to investors in the near future. “We’re starting with gems and jewelry, but we want to go into other asset classes – all assets that are considered passions and pursuits.” She mentioned wine, rare watches, classic automobiles and branded jewelry could all be on the horizon. “We plan to launch a new asset during Fashion Week – a necklace that was worn by a very famous person to the Oscars in 2022.”

Auslander is offering women the opportunity to invest in something they can both see as a viable investment and love as an asset class, the way men love watches. “At first, everyone looked at me like I was crazy,” she said. “And now that LVMH has snuck into the top 10 companies in the world, and luxury is outperforming healthcare and big tech, LUXUS is getting a lot of attention and respect.”

Our thanks to Jane Hanson and Forbes for this fascinating update

It’s said that diamonds are forever, and it appears at least one is “Eternal.”

Today, Sotheby’s announced the auction of a 10.57-carat internally flawless, fancy vivid purplish pink diamond known as “The Eternal Pink” and described as, “arguably the most significant pink diamond to ever appear at auction.”

The diamond will headline Sotheby’s June 8 jewelry auction in New York and is projected to sell for at least $35 million, or $3.3 million per carat, the highest price-per-carat estimate placed on a diamond or gemstone offered at auction, the auction house said.

It said the diamond will challenge the price-per-carat record for a diamond or gemstone currently held by the 11.15-carat “Williamson Pink Star” (sold for $57.7 million/$5.2 million per carat), noting that $35 million/$3.3 million per carat is the diamond’s low estimate.

“This color is the most beautiful and concentrated shade of pink in diamonds I have ever seen or has ever come to market,” said Quig Bruning, head of Sotheby’s Jewelry Americas. “The Eternal Pink’s immense presence and great rarity make it comparable to ultimate masterpieces of art—far rarer than a Magritte or a Warhol.”

Debswana, the joint venture between De Beers Group and the government of Botswana, mined the 23.78-carat rough diamond that became The Eternal Pink at its Damtshaa mine in 2019. (Damtshaa currently is on care and maintenance, meaning it is not producing.)

Diacore, which has cut some of the world’s most valuable diamonds, including the rough that became the Williamson Pink Star, took six months to transform the nearly 24-carat pink rough into a cushion-shaped, internally flawless diamond.

The Eternal Pink’s appearance at auction this June follows an interesting end of 2022 for natural colored diamonds at auction.

While the Williamson Pink Star exceeded expectations and set a new price-per-carat record when Sotheby’s Hong Kong sold it in October 2022, the final sale price for the “Fortune Pink,” an 18.18-carat fancy vivid pink, was at the low end of its estimated range the following month at Christie’s Geneva.

In December, Christie’s had to pull another fancy vivid pink diamond from auction, this one weighing 13.15 carats. News reports later emerged that the auction house had withdrawn the diamond from its jewelry auction because it allegedly was stolen.

In addition, three blue diamonds from an eight-stone collection titled “The De Beers Exceptional Blue Collection” didn’t sell when Sotheby’s put them up for auction.

A 5.53-carat fancy vivid blue failed to find a buyer at Sotheby’s Geneva in November, and nobody bought the 3.24-carat fancy vivid blue or the 2.08-carat fancy intense blue offered at Sotheby’s New York the following month.

Sotheby’s is slated to publicly unveil The Eternal Pink Saturday in Hong Kong, coinciding with the auction house’s celebrations around its 50th anniversary in Asia.

Following its debut, the stone will make stops in Dubai, Singapore, Shanghai, Taiwan and Geneva (exact dates to come).

The Eternal Pink eventually will come to New York, where it will anchor Sotheby’s “Magnificent Jewels” auction on June 8.

Our thanks to Michelle Graff and National Jeweler for this informative update