Can argyle diamond prices be sustained?

[susiegrneyes]

I purchased a .24 7p SI1 diamond (fancy light pink by GIA) a few years back for $2500 and now Leibish is asking 14k for a similar stone.

I also saw another respected FCD dealer raise prices on their existing argyle stock recently. One stone on my wishlist went from $3,300 to $5,000.

Now that the argyle mine has closed we know that there's no more supply, but I'm curious to know if others think the demand (and high prices) will last long term or if Argyle diamonds will go out of fashion?

 

[monipod]

Good question. I'm from Western Australia where the Argyle mine operates (but it's a good 10+ hour drive from the city) so when my mother gave me her brownish pink Argyle (.25 MRB) diamond ring that she won at a raffle (and I also have one other eeny weeny pink stone) I was happy to have a piece of local history. Other than that, I personally don't love pink or pink diamonds, Argyle or otherwise. TBH, if we were talking purple diamonds, then I'd be all over it.

So I wonder if any initial increase in value will be due to panic buying of sorts. Worrying that if you don't buy now, you'll never be able to buy again for the same price. I suppose that's true but in the long term, I'm not sure if the increase will continue exponentially.

At the end of the day, pink lab stones are getting better and better in colour (if I really wanted a bigger, pinker stone, I'd consider lab) so it's really only people hung up on mined AND pink that will determine the future price of Argyle pinks.

 

[LilAlex]

Speculation: In the US, expected changes in the CG tax, federal income tax brackets, federal estate-tax threshold, and IRS enforcement coupled with the threat of a possible first-ever wealth tax will continue to exert upward pressure on the price of colored diamonds (especially pink, with lots of press and popular appeal), Kashmir sapphires, and the like.

I support most of these changes to the tax code in theory. In practice, I am skeptical whether they will target the "right" earners.

I assumed that a stock market crash -- with the attendant tough times for the rich -- would stop the relentless (and discouraging, for me) gem-price spiral but now I'm not so sure.

EDIT: I am not saying that these things area a "good investment" for mortals like me and most of you. I do think they will be one of many portable, semi-fungible ways to conceal generational wealth.

 

[John Pollard]

Now that the argyle mine has closed we know that there's no more supply, but I'm curious to know if others think the demand (and high prices) will last long term or if Argyle diamonds will go out of fashion?

Pairing a diamonds' forever symbolism with a love-associated color will likely continue to have appeal. The scarcity of naturally occurring pinks is already hard to overstate. 80% of them came from Argyle, so the rarity will likely only increase, which will have value for an authenticity audience.

To your point, @susiegrneyes , it has been a crazy climb. Rio Tinto reported a 500% rise in the value of Argyle pinks over the past 20 years. It gets exaggerated with carat weight, since less than 10% of pinks finish > 0.20 ct... Last month a 2.17 ct fancy vivid purplish-pink SI1 sold for $3.51 million, $1M over its highest estimate. In a few weeks the 15.81 ct Sakura Diamond (not to be confused with the 1.84 ct Argyle Sakura) will be the star of the Christie’s HK Magnificent Jewels sale. It's estimated to gavel for up to $38M and might go even higher. It's Fancy Vivid Purplish-Pink, Flawless and (drum roll) Type IIa... Trifecta.

Leibish dubbed the Argyle pink diamond "the most concentrated form of wealth on Earth." Right now we're in a period of revenge-spending. High net worth individuals are compensating themselves for 2020 with big spends, celebrating luxury items. Recent auction results reflect that trend. It will be interesting to see what happens in coming years.

Nerdy stuff: Lab grown diamonds can be made pink through irradiation, but the color of a natural pink or red diamond was caused by distortions in the crystal lattice resulting from intense heat and pressure during their formation. Argyle was geologically unique as a lamproite pipe (other diamond sources are kimberlite). So while there are other sources around the world, that lamproite mine was special. Super-nerdy stuff: Those distortions turn many of those cute, lovable pink crystals into nasty beasts when they're being cut and polished.

 

[lulu_ma]

Hi @John Pollard Thanks for the info. I love that term "revenge-spending."

Can you please clarify what you mean when you say, "Those distortions turn many of those cute, lovable pink crystals into nasty beasts when they're being cut and polished."?

 

[musicloveranthony]

I remember them being practically throwaway diamonds just a few years ago! It's so crazy to see these prices rise the way they are. I remember not long ago seeing 3-4 carat parcels going for a few hundred dollars. I had to check my eyes when I saw similar parcels going for thousands of dollars on instagram lately.

If I'm being fully honest, I don't find them attractive.

 

[Karl_K]

I think they will rise then over shoot then come back down to the new normal.
Where those numbers fall is anyone's guess.

 

[Karl_K]

Can you please clarify what you mean when you say, "Those distortions turn many of those cute, lovable pink crystals into nasty beasts when they're being cut and polished."?

They have been known to cleave and crumble while being cut as well as having random soft and hard spots that mess up the best plans of man and laugh at them.
It really takes a specialist to cut them.

 

[John Pollard]

Hi @John Pollard Thanks for the info. I love that term "revenge-spending."

Can you please clarify what you mean when you say, "Those distortions turn many of those cute, lovable pink crystals into nasty beasts when they're being cut and polished."?

You're welcome @lulu_ma . "Revenge Spending" was coined in China in the 1980s, to describe the unleashing of pent-up consumer demand following their Cultural Revolution. It happened in China again last year, as cities emerged from the pandemic - and has trended in different places since, including the diamond jewelry sector since last summer.

To clarify the cut/polish comment: Most people know diamond is the hardest material known, only diamond grit can shape and smooth another diamond, etc. What's less known is that, even at 10 on the Mohs hardness scale, rough diamond crystals have softer and harder spots. They also have specific growth directions. Graining, twinning and other confounders can limit a diamond cutter's options when it comes to polishing direction. If you've ever whittled wood (is whittling still a thing?) you know what I mean. It can be smooth to whittle in one direction, near-impossible in another.

Now take the above and sprinkle in more distortions in the crystal - which caused that pink coloration. And that's before considering inclusions, strain, etc...

The Argyle Pink Jubilee concealed such a beast. You can read about it here.

 

[John Pollard]

They have been known to cleave and crumble while being cut as well as having random soft and hard spots that mess up the best plans of man and laugh at them.
It really takes a specialist to cut them.

+1

 

[Avatar345]

Pairing a diamonds' forever symbolism with a love-associated color will likely continue to have appeal. The scarcity of naturally occurring pinks is already hard to overstate. 80% of them came from Argyle, so the rarity will likely only increase, which will have value for an authenticity audience.

To your point, @susiegrneyes , it has been a crazy climb. Rio Tinto reported a 500% rise in the value of Argyle pinks over the past 20 years. It gets exaggerated with carat weight, since less than 10% of pinks finish > 0.20 ct... Last month a 2.17 ct fancy vivid purplish-pink SI1 sold for $3.51 million, $1M over its highest estimate. In a few weeks the 15.81 ct Sakura Diamond (not to be confused with the 1.84 ct Argyle Sakura) will be the star of the Christie’s HK Magnificent Jewels sale. It's estimated to gavel for up to $38M and might go even higher. It's Fancy Vivid Purplish-Pink, Flawless and (drum roll) Type IIa... Trifecta.

Leibish dubbed the Argyle pink diamond "the most concentrated form of wealth on Earth." Right now we're in a period of revenge-spending. High net worth individuals are compensating themselves for 2020 with big spends, celebrating luxury items. Recent auction results reflect that trend. It will be interesting to see what happens in coming years.

Nerdy stuff: Lab grown diamonds can be made pink through irradiation, but the color of a natural pink or red diamond was caused by distortions in the crystal lattice resulting from intense heat and pressure during their formation. Argyle was geologically unique as a lamproite pipe (other diamond sources are kimberlite). So while there are other sources around the world, that lamproite mine was special. Super-nerdy stuff: Those distortions turn many of those cute, lovable pink crystals into nasty beasts when they're being cut and polished.

Hey John, I couldn't find it, but do you know where the Sakura was mined from? I was checking out some articles and saw the 'Spirit of the Rose' was a large Russian pink diamond... with the carat weight, flawlessness, and I'm figuring kimberlite(?) origins of stones like this, I just didn't know how totally random pink discoveries like this were (outside Argyle) or whether there was some aspect to the ground in Russia, for instance, or wherever, that might lend itself as an explanation of sorts? Kind of like the way blue diamonds and S Africa are associated...

 

[John Pollard]

Hey John, I couldn't find it, but do you know where the Sakura was mined from? I was checking out some articles and saw the 'Spirit of the Rose' was a large Russian pink diamond... with the carat weight, flawlessness, and I'm figuring kimberlite(?) origins of stones like this, I just didn't know how totally random pink discoveries like this were (outside Argyle) or whether there was some aspect to the ground in Russia, for instance, or wherever, that might lend itself as an explanation of sorts? Kind of like the way blue diamonds and S Africa are associated...

I haven't seen it listed. Scientifically speaking, most Australian and Russian pinks are Type Ia. South Africa, Tanzania and Brazil have yielded Type IIa pinks, but - unlike Russia and (formerly) Argyle - it's not regular, those finds are unicorns.

Whether origin is part of the press package depends on a number of factors. Argyle origin commands a prestige premium so it's a no-brainer for the auction house to broadcast it. Alrosa is super good at PR - and they cut as well as mine - so they're effective at connecting polished auction items back to the buzz they had as rough diamonds.

Lucapa did find this bad boy in Angola last year. Meet the Lulo pink 46.7 carat rough and resulting 15.2 ct FIOP heart shape.

It was sold to their cutting partner, which happens to be a Graff subsidiary - some people just seem to win so always.

Crazy footnote: Lucapa runs a kimberlite operation in Lesotho, but that Angola project is alluvial. Essentially, someone could been strolling a riverbed and tripped over that pink rough. Logically, they're hard at work trying to find the primary hard-rock source.

 

[distracts]

Right now we're in a period of revenge-spending. High net worth individuals are compensating themselves for 2020 with big spends, celebrating luxury items. Recent auction results reflect that trend. It will be interesting to see what happens in coming years.

I'm sure no one on PS is doing that *cough* hides credit card receipts *cough*

I think for at least the next 10 years prices of these will continue to go up. After that, who knows. But probably up but more slowly.

 

[Avatar345]

I haven't seen it listed. Scientifically speaking, most Australian and Russian pinks are Type Ia. South Africa, Tanzania and Brazil have yielded Type IIa pinks, but - unlike Russia and (formerly) Argyle - it's not regular, those finds are unicorns.

Whether origin is part of the press package depends on a number of factors. Argyle origin commands a prestige premium so it's a no-brainer for the auction house to broadcast it. Alrosa is super good at PR - and they cut as well as mine - so they're effective at connecting polished auction items back to the buzz they had as rough diamonds.

Lucapa did find this bad boy in Angola last year. Meet the Lulo pink 46.7 carat rough and resulting 15.2 ct FIOP heart shape.

It was sold to their cutting partner, which happens to be a Graff subsidiary - some people just seem to win so always.

Crazy footnote: Lucapa runs a kimberlite operation in Lesotho, but that Angola project is alluvial. Essentially, someone could been strolling a riverbed and tripped over that pink rough. Logically, they're hard at work trying to find the primary hard-rock source.

Do heart shaped diamonds produce a lot less waste or something? I notice a lot of these pinks get turned into hearts lol.. which, I can understand of course from an imagery standpoint, but just seems so strange from a "something one might actually mount" standpoint. How many other smaller diamonds might be spun out of that 46 carat rough as well?

 

[John Pollard]

Do heart shaped diamonds produce a lot less waste or something? I notice a lot of these pinks get turned into hearts lol.. which, I can understand of course from an imagery standpoint, but just seems so strange from a "something one might actually mount" standpoint.

The polished plan is always based on yield.

A lot of heart shapes are fashioned from macles. Also called twinned crystals, macles are notoriously challenging to fashion because of an internal change in growth direction where they initially joined. Diamond cutters exercise great caution along this “twinning line” since the inadvertent release of strain accumulated over eons of formation could cause the stone to fracture, as the Argyle Pink Jubilee did in the story I linked above - however the APJ was not a macle.

If you're tracking with me (and I know you are) you have already connected the lattice distortions and fault-lines associated with pinks to "why" pink heart shapes are abundant.

Macles (left) have a flat geometry when compared to typical untwinned dodecahedral and octahedral diamond crystals (center and right).



The triangular outlines and low profiles make macles well-suited for producing shallow diamond shapes, such as the heart. The deeper crystals are typically used for producing round brilliants, cushions, princess-cuts and other shapes with more depth. It just makes more money-sense to do so.



Macles are also useful for producing trilliants, baguettes, lozenges, kites, etc. And, while shallow shapes do not come from macles, exclusively, it’s a safe bet that no diamond crystal has shown “more heart” over the years than the macle (see what I did there?).

As my wife noted, in romantic terms, a single, sparkling heart-shaped diamond seems like a storybook ending for two rough crystals that joined and became one. Aww.

I hate to rain on her parade, but many pink rough diamonds fashioned into hearts weren't twinned. They were conventional rough shapes that wound up cleaving or had too many complications to fashion deep (sorry honey).

 

[Garry H (Cut Nut)]

Late arrival. Some great posts Sir John!
Having had a long relationship selling Argyle goods and knowing their chief scientist for 2 or 3 decades I will throw some stuff on the campfire.
The only other pinks really like Argyle are from Brazil. They probably came from a carbonite huge volcanic eruption but there is no known source. The fact is they too got seriously deformed during their rough super fast ride from hundreds of miles down. If they come up too slowly they get resorbed and shrink as did Argyle diamonds.

As to value - I think the views posted above are fair. Who knows??? I bought my 1.03ct vivid marquise as a personal investment 7 years ago from a director of the mining Co that discovered the mine. It is an Argyle diamond that pre dates the naming of the mine. Dealers tell me it is worth about 6-8 times what I paid for it (happy to take 5 times though).

But what is more interesting for this discussion. As John says - the average rough weight from Argyle was around 0.12ct. Argyle provided jewelers and designers lots of very small strong to pale pink melee that sold for 2-3 times the price of colorless diamonds. Those same goods have now gone forever. And their prices have doubled this year as we all stock up so we can meet regular jewel demand using them as accent stones.

A 1/4carat pink champagne that I sold 20 years ago for $5k we recently priced and appraised at $50k.

We are now selling what are called a Collectors edition in small IGI credit card sealed packs at about 5-10 times what those stones probably cost John Glajz, the very smart dude who bought up lots of Argyle lot numbered parcels and has sorted them into usable sets of pairs to sets of 6 etc. Well done mate!

Those small very strong colored pinks stones are certainly going to never be found anywhere else. It you sliced and diced the pinks from Russia or Angola into 0.05ct stones they would be so pale no one would care much for them. We can not get enough 4PR and 5PR goods and would love to be using 3PP in our settings but the prics are just crazy!

 

[John Pollard]

We are now selling what are called a Collectors edition in small IGI credit card sealed packs at about 5-10 times what those stones probably cost John Glajz, the very smart dude who bought up lots of Argyle lot numbered parcels and has sorted them into usable sets of pairs to sets of 6 etc. Well done mate!

That's great, Garry.

For anyone interested, it's a really nice commemorative project.

https://www.jewellermagazine.com/Ar...us-Argyle-pink-diamonds-released-in-Australia

Like collectible, unopened action-figures - but with values like elastic Batman or diamond-encrusted Barbie.

 

[Ann]

I always always wanted a pink diamond. And it had to be an Argyle. I should have bought it years ago. I've been watching the prices soar. Likely will never happen now.

 

[Garry H (Cut Nut)]

That's great, Garry.

For anyone interested, it's a really nice commemorative project.

https://www.jewellermagazine.com/Ar...us-Argyle-pink-diamonds-released-in-Australia

Like collectible, unopened action-figures - but with values like elastic Batman or diamond-encrusted Barbie.

And the new book is great too!

 

[Mazlou]

I'm wondering if the anticipated scarcity will affect availability of pink melee. I have a pave ring with 5-6P stones. It's insured, but will it be harder to replace one of these tiny diamonds if it falls out?

 

[Garry H (Cut Nut)]

I'm wondering if the anticipated scarcity will affect availability of pink melee. I have a pave ring with 5-6P stones. It's insured, but will it be harder to replace one of these tiny diamonds if it falls out?

Hard is a soft word.
Those will have doubled in price this year.