Fancy color diamonds include yellow, blue, pink, green, red, and a few others. The color of most diamonds comes from trace particle impurities that are present in the carbon lattice structure of the stone as it grows below the Earth. The most common trace element in diamonds is nitrogen, which imparts a yellowish or brown tint to the diamonds, depending on its concentration. Diamonds with nitrogen impurities are called Type Ia diamonds, and represent about 98% of all gem-quality natural stones in the world. Even D-color diamonds can have trace amounts of nitrogen, but the concentration is so small that it cannot be detected without sophisticated lab equipment.
In simple terms, exploration companies take a series of samples from a kimberlite target, with each one getting gradually larger and more expensive. Each type of test is designed to assess different variables, depending on the stage of exploration. Since sampling is expensive, companies often have to raise additional financing before continuing on to the next phase of testing, and the previous results must be positive to ensure that they can raise sufficient capital to continue.
If the nitrogen atoms are dispersed throughout the crystal in isolated sites (not paired or grouped), they can create the range of strong yellow colors that qualify as fancy yellow. Of all the fancy diamond color groups, yellow is by far the most common, and therefore the least expensive. However, the ‘canary’ yellow colors still represent less than 0.1% of all gem-quality diamonds.
Blue diamonds, second only to red in terms of their rarity, are caused by boron impurities in the stone. Since boron is much less abundant on Earth than nitrogen, blue diamonds are extremely rare. Purple stones are caused by a combination of crystal lattice distortion combined with a high concentration of hydrogen.
Pink, red, and orange diamonds are thought to be caused by plastic deformation of the crystal lattice structure, caused by exceptional temperature and pressure. Because red diamonds are so incredibly rare, little is known about their formation. Scientists believe that unlike other fancy color stones, reds and pinks are not a result of impurities in the stone, but rather a natural alteration of the crystal lattice structure that occurs during the diamonds’ transportation to the surface of the Earth.
Color diamond grading
It goes without saying that diamond grading is a critical determinant of value, and that diamonds should be purchased and sold with accurate grading certificates from a reputable grading laboratory. With fancy colors, the color grading takes on even more significance than with colorless diamonds, because even subtle differences in color have a much larger influence on value than in white stones.
Fancy color diamonds are graded on a nine-point scale, with the following color saturation descriptors: Faint, Very Light, Light, Fancy Light, Fancy, Fancy Dark, Fancy Intense, Fancy Deep, and Fancy Vivid. The difference in value between one level of saturation and the next can be 50-100%. Fancy color diamond grading is further complicated because these stones can often exhibit a component shade of different colors simultaneously.
Laboratories use a list of 27 color hues that span the full spectrum for colored gems and diamonds (Red, Orangish-Red, Reddish-Orange, Orange, Yellowish-Orange, Yellow-Orange, Orange-Yellow, Orangish-Yellow, Yellow, Greenish-Yellow, Green-Yellow, Yellow-Green, Yellowish-Green, Green, Bluish-Green, Blue-Green, Green-Blue, Greenish-Blue, Blue, Violetish-Blue, Bluish-Violet, Violet, Purple, Reddish-Purple, Red-Purple, Purple-Red, Purplish-Red). A modifying color combination can also be added (e.g., Olive or Brown-Olive) for stones without the purest hues.
Fancy color diamonds as financial instruments
Natural fancy colored diamonds are amongst the rarest materials in existence on Earth, and command extremely high values as a result. These stones tend to be immune to the volatility of diamond pricing that can be seen in other areas of the diamond spectrum.
Colored diamonds have an amazing financial track record, and blues and pinks have tended to double in value at least every few years. This created an entirely new segment of the investment community: collectors who deal in fancy color diamonds, which are being made available to the general public to invest in a physical hard asset.
In the past few months alone, record-breaking auction prices have been achieved for both pink and blue diamonds, and auction houses have broken individual sales records. The wealthy Asian market continues to covet these rare beauties, and this has helped fancy color diamonds to continuously outpace the price growth of virtually any other asset in the world.
Among these diamonds are the Blue Moon, the Unique Pink, the Oppenheimer Blue, and the Aurora Green, to name just a few.
The rising price trend
What is interesting about this is that the market understood the value of these diamonds and acted on it. The rarity and beauty of fancy color diamonds created the enduring value that is so appreciated by financial firms, investors, private collectors, and more. The auction houses had an important role in this by providing potential buyers with a detailed, in-depth, and extremely transparent information base that allowed an examination of the potential of these diamonds. This is an essential component in making an informed decision, as Ehud Laniado advocated over the years for white diamonds.
The availability of this information is what allowed this specific type of diamond to flourish in a way that Ehud Laniado hoped white diamonds would as well. And it was this information that allowed prices to rise over the years, even if the economic backdrop may not have been very favorable.
The one item that we need to add to the already available information is current and historic pricing. With it, one could assess historic behavior, and decide if now is a good time to buy, sell, or wait – not a dissimilar process to financial decision-making.
1The use of the Mercury Diamond Price List™ is subject to the Terms & Conditions of Use found at www.mercurydiamond.com/terms.
The views expressed here are solely those of the author in his private capacity. None of the information made available here shall constitute in any manner an offer or invitation or promotion to buy or to sell diamonds. Investing or trading in diamonds carries a high level of risk and therefore you should become aware of all the associated risks before entering into any transaction. No one should act upon any opinion or information in this website (including with respect to diamonds values) without consulting a professional qualified adviser.
The List is the exclusive property of Mercury Diamond™ ("Mercury") and not of Mr. Ehud Arye Laniado who assumes no liability in connection with the List and any of Mercury's publications. Readers are advised to review all relevant information provided by Mercury in connection with the List including any disclaimers.
Your feedback is important. Please email us at This email address is being protected from spambots. You need JavaScript enabled to view it.