Featured in everything from sparkling engagement rings to understated stud earrings, diamonds are one of the most sought-after – and expensive – gems on the market. They are also superstars at auction, consistently receiving hammer prices many times higher than their original estimates. Although the market price dipped during 2020 as a result of the COVID-19 pandemic, the value of rough diamonds has recovered significantly and prices of polished gems and jewellery are continuing to climb.
Jewellery sales as a whole have risen significantly over the past decade, peaking in 2018 when buyers across the UK spent £13.9 billion on jewellery, according to the Office for National Statistics. About £112 million came from Valentine’s Day sales alone, proving that a lovely necklace or new pair of earrings is still a welcome gift for a loved one.
See also: Barnebys' Guide to Diamonds
With declines in mine production and retail jewellery stores forced to close, 2020 was a rough year for the diamond trade. However, online sales continued and diamonds remained a desirable commodity. Because they are tangible and have a steady value and appreciation, diamonds may be a ‘safe haven’ investment like silver and gold, both of which ultimately jumped in price by the end of 2020 as investors diversified their holdings. Diamond prices sank 9.3% before rising 7.3% during the second half of 2020, a quick recovery that is promising for their investment potential.
While the price of rough diamonds fluctuates, the prices of polished diamonds are rising and there has been a steady demand for large, high-quality diamonds from those who can afford them. Because of the artificially low interest rates and stimulus packages, some investors fear currency devaluation and are looking for more secure holdings. Prices for high-quality one-carat diamonds grew around 12% over the year, and many stones sold for exceptional prices: the blue diamond ring pictured above sold for £8,506,784 in July 2020, 36% above its original estimate. This demand for high-end pieces is driven by affluent buyers, who are less likely to feel the effects of the market downturn and who may be looking for alternative investments – or perhaps just a beautiful heirloom.
See also: Tiffany: The King of Diamonds
Some of the most eye-popping prices ever achieved at auction were for diamonds, with the current record belonging to the ‘Pink Dream’ or ‘Pink Star’ diamond, which sold for 18% above its estimate at a staggering £56,409,825 at Sotheby’s in 2017. In November 2020, another coloured diamond, called ‘The Spirit of the Rose’ after Jean-Louis Vaudoyer’s ballet Le Spectre de la Rose, sold for a very respectable £20 million. ‘The Spirit of the Rose’, a stone of exceptional clarity, was the largest diamond ever discovered in Russia and set the world record for the most expensive pink-purple diamond ever sold at auction.
See also: The World’s Ten Most Expensive Diamonds
Whether your tastes lean towards Cartier, Tiffany’s or Chanel, there is a master jeweller out there where you will find stones to your liking. While your diamonds will no doubt appreciate with time, for now you may enjoy their sparkle, perfect clarity and multifaceted beauty.