Fancy Yellow Diamond Investments

Building a solid investment portfolio requires the fundamental knowledge that your money is safe and will appreciate in the long run. The current uncertain economic, financial and political environment has - if anything - proven that stocks and bonds are not as safe as we used to consider them, creating the awareness that earnings and savings should be put somewhere more secure.

The law of supply and demand is defined by the effect that the availability of a particular good and the demand for that good has on the price. The combination of a low supply and a high demand increases the price and vice versa. Fancy colored diamonds are extremely rare and the decreasing supply translates into continuously rising prices, breaking records year after year. Some natural fancy colored diamonds are rarer than others and thus achieve even better price performances.

“Colored Diamonds have the best fundamentals. The gap between supply and demand is much greater compared to other commodities and is growing wider every year.”
- EVY HAMBRO

Yellow’s Shine

One of the reasons for the scarcity of certain colored diamonds is the peculiar nature of color in diamonds. An astonishing five-stone Diamond Collection on exhibit at the American Museum of Natural History in New York City was the culmination of 40 years of collecting yellow diamonds from 1 carat up to 5 carats.

“You don’t cut a yellow like you would cut a blue or green. You must treat the different colors differently,” a museum curator explained. “The cushion or rectangular cut was designed to create more color — the most color you can obtain. It was designed to create the best sparkle and scintillation. If you take the same diamond and cut it to a square brilliant, the color would disappear.”

This accounts for the absolute scarcity of intense and vivid cushion and rectangular yellow diamonds. They can only be cut from a rough that is intensely saturated with color. “There is great demand particularly in Europe, Asia, India and the Middle East for intense and vivid yellow diamonds. That is also a function of the lack of supply as there are fewer yellows to offer each year.

Are Yellow Diamonds Rare?

A yellow diamond’s rarity depends on the exact shade of yellow. Light-colored yellow diamonds are somewhat common and are more suitable for inexpensive jewellery purposes. However, for investment purposes, those with an intense yellow color are exceedingly rare and valuable. The 4 C’s should be taken into account for yellow diamonds as they are for colorless diamonds.

Colored diamonds are also graded on Cut, Color, Carat and Clarity. However, because the biggest difference in value comes from color, yellow diamonds with a high grade in color (Fancy Intense – Fancy Vivid) carry a much higher price per carat than one with a lighter shade of yellow.