Shares too expensive? Bitcoin train departed? Gold and silver out? How about some colored gemstones? Sapphire, ruby & Co. can be a useful and lucrative enrichment for the depot.
The auction lasted just under five minutes. And in the end there was a new record. A few days ago Sotheby’s auctioned one of the world’s most spectacular gemstones, a flawless pink diamond weighing 59.6 carats, in Geneva for around 62 million euros. It was previously called “Pink Star”, but its new owner, a diamond cutter from New York, officially renamed it “Pink Dream”.
Never before has a single diamond brought in such a sum at an auction. The previous record was almost 37 million euros and was only reached three years ago. Not only diamonds, but also classic colored gemstones – emeralds, sapphires or exotic such as the mandarin garnet – condense incredible values in the smallest of spaces.
Many varieties are in such demand due to the global search for tangible assets that prices are skyrocketing everywhere. Anyone who deals with gemstones as an investment should, however, familiarize themselves intensively with the individual stones and the sometimes peculiar market rules.
In contrast to the diamond market, where a few large international corporations like De Beers set the prices, the market for colored gemstones is more diverse in the truest sense of the word. Prices usually react more quickly to supply and demand. In this respect, there is always something speculative about buying a gemstone.
Demand is dominated by China
If you want to get some glamor into the depot, you have to dig deeper into your pocket today than a few years ago. “The demand for high-quality colored stones is still unbroken and the price is absolutely dominated by the Chinese market,” says the Viennese gemstone expert Heinz Schiendl.
If you want to buy untreated, i.e. not burned rubies or the coveted Winza rubies, you have to reckon with a four- or five-digit amount – depending on the weight and quality. The prices per carat (equivalent to 0.2 grams) for good quality rubies are currently well over 2000 euros, often even over 3000 euros.
In addition to rubies, the closely related sapphires and emeralds are among the “standard values” among colored gemstones. The Detmold expert and author Johannes O. Vranek calls them “jewels”. The emerald in particular is one of the greatest classics and was already highly valued in ancient times.
It is reported about Emperor Nero, for example, that he is said to have regularly watched the fights of gladiators through a green emerald. It is not known whether the stone was used as a fashion accessory or as pragmatic sun protection. What is certain is that emeralds have been of stable value for centuries.
Stagnation in emeralds
In contrast to their green relatives, sapphires come in an impressive variety of colors. But they mustn’t be red, because then they would be rubies. Collectors and investors appreciate sapphires in the purest cornflower blue. Sapphires from ten carats upwards or in fantasy colors are suitable as capital investments.
The prices vary, depending on the weight and quality, between a few hundred euros and the equivalent of an upper middle class car. In the case of emeralds, on the other hand, there has been a stagnation in performance in recent years.
Investors who like things a little more speculative should take a look at the “small caps”. Some of their prices have exploded in recent years, mainly thanks to strong demand from China. “An eye-clean, 20-carat rubellite tourmaline in top color is currently around 500 euros per carat in European wholesalers. At a Chinese dealer, you get around 1,000 US dollars per carat for the same stone, ”says Heinz Schiendl.
Individual stones, such as the blue zircon, peridot and chrysoberyl from ten carats, are on a high price. This is an adjustment to the price development of stones with comparable colors, such as aquamarine or green tourmaline, with which one could earn a lot of money in the past few years.
Mandarin garnet was a stroke of luck
“Fine-colored aquamarines today cost almost twenty times what you had to pay in the 1970s”.
Mandarin garnet prices have also skyrocketed in recent years. Anyone who took hold of this gemstone 20 years ago and acquired very good qualities should have multiplied their wealth since then. Alexandrite is also one of the investment stones. “An extremely rare variety of Chrysoberylle”,
Interesting buy signals are also coming from the USA. The American Gem Traders Association (AGTA) recently named tanzanite, sapphire and aquamarine as the trend stones of tomorrow. Tanzanite is particularly popular in the USA. As a result of the financial and economic crisis, trade in these gemstones there has declined significantly in recent years.
In the meantime, the demand is rising again, while the supply of these top stones is scarce. Around Kilimanjaro, attempts are being made in some places at a depth of 100 meters to wrest the last remnants of these treasures from the earth, but technology is gradually reaching its limits. Large alternative sites are not yet known.
Larger stones are considerably rarer
The coveted Paraiba tourmalines in excellent quality, the prices of which have increased almost tenfold in just a few years, are among the outperformers among the “small caps”. Today you have to reckon with high four-digit carat prices for point stones in wholesale.
The criteria for assessing the quality of colored gemstones are similar to those for diamonds. Of course, the price of a colored gemstone depends on its weight. A sapphire with over three carats will always cost disproportionately more than a 1.5 carat with a comparable color and purity, simply because the larger stones are considerably rarer. And the color of the stones also determines the price.
But when it comes to purity, colored gemstones are different from diamonds. Flawless diamonds or those with “very, very small inclusions” usually fetch the highest prices. Anyone interested in colored gemstones will come across the term “eye clean”. It states that the specialist cannot detect any inclusions with the naked eye (and not under a magnifying glass with ten times magnification as with diamonds).
In addition, inclusions in colored gemstones are considered to be “fingerprints of nature”. They give clues as to the authenticity and origin of the stones. The finest inclusions in sapphires and rubies are responsible for particularly interesting light reflections – the so-called asterism effect.
Certificates are essential
Depending on the incidence of light, this usually creates a six-pointed star image on the surface of the gemstone. So while inclusions usually significantly reduce the value of a diamond, with colored gemstones the very personal feeling decides on a quality assessment of inclusions.
Certificates from recognized gemological institutes are essential for investment gemstones. In addition to a detailed description and grading, this expertise often also includes a current assessment of the market value, which is important for insurance reasons.
But for the investor it is not only the emotional return and the pride of ownership that count. The main question that arises for him is whether it still makes sense to invest in colored gemstones after the price increases in recent years. As in Nero’s time, this is supported by the rarity of high-quality stones. “Even with the best international contacts to miners and exporters, it is at best possible to replace two out of three stones sold equally”, says Heinz Schiendl.
A high demand therefore meets limited resources. “If this trend continues, most of the gemstones will rightly bear this name again, because only a few customers will be able to afford the extreme price level.” Perhaps now is the last opportunity to shop a little of the Roman antique glamor.