The New Trend - Investing in Colored Gemstones!
Psssssst… “The smart money is going on the Colored gemstones.”
It seems that maybe, choosing a diamond for an engagement ring to give to your fiancé is beginning to look quite jaded, unimaginative and some what passé.
Most people in the industry are aware that the whole “diamonds are a girl’s best friend” phrase was just part of a huge and clever marketing exercise by De Beer in the 1930′s They used Hollywood movies and stars to promote diamonds as the number one choice for engagement rings.
It worked, and while diamonds are still the first choice for most people, the more discerning, thoughtful buyer is looking at his options and discovering a huge choice of beautiful (and expensive if so required) alternative gemstones.
Diamonds are not, and never have been, in short supply.
Burma produces 90% of the world’s rubies and it is common knowledge that large, unheated red Burmese rubies are extremely rare. This has been the case for many years. Large unheated quality Burmese rubies sell, on average, for about $160,000 – $420,000 per carat.
These gems are hardly seen on the market. If you are in possession of one, keep it under wraps. If you know of the whereabouts of such a gem, buy it if you can!
Gem Traders in Myanmar (Burma) took a record $1.44 billion at a 2 week trade show in November 2010. 4,000 of the traders were from overseas. Earlier Trade Shows in March and October made 400 and 700 million Euros. This years Hong Kong Gem Show, in September 2011 was the biggest and most popular yet.
Foreign demand, particularly from Asia, for Myanmar’s natural stones is huge and increasing. The Chinese and Indian markets are the main buyers and are driving the demand for gemstones.
Colored Gem Stones have always been “in vogue” amongst those with considered taste. Kate Middleton’s 18ct Sapphire engagement ring reinforced this fact. Received from Prince William, it had a huge impact on engagement rings with many gemstone internet sites crashing as people rushed to copy the royals.
When Jackie Onassis received an Emeraldengagement ring from John F Kennedy, the result was that Emerald engagement rings became one of the most popular choices for brides to be in the mid 1950′s.
The trend is being seen much more now in the world of the celebrity; Penelope Cruz recently received a huge blue sapphire as her engagement ring. Jessica Simpson was given a Burmese 4ct ruby and diamond ring.
During difficult times, people look at alternative investments and at the moment there is a lot of talk about investing in gem stones. Many investors have left the usual paper investments alone and switched to hard assets. Having something real in your possession seems a much healthier and secure option than gambling on numbers and forecasts.
Good quality colored gemstones are hard to find. With supplies dwindling, they will just get rarer.
At a Christie’s auction in Hong Kong, in the autumn of last year, a 7.04 carat Burmese ruby sold to a private Asian buyer for $2.9 million. That’s $411,000 a carat.
That however is not the record! The world record was $420,000 per carat or $3.62 million for an 8.62 carat Burmese ruby.
Usually, the redder the ruby, the more expensive it is. However, sometimes a ruby will fetch a high price if it is free of inclusions, regardless of how red it is. An example is at Christie’s in 2005 when an 8.01 carat Burmese ruby sold for $2.2 million, or $274,000 per carat. This Ruby was only 65% red but free of inclusions.
These Burmese Ruby earrings weighing 5.12 and 4.24 carats sold for $2.59 million at Christie’s Dec 2010.
Dealers are now being contacted by investors and asked to present a collection of stones for their perusal.
It’s true that gold has always been a favorable option but it’s not as easily transportable as gems and so, rubies, sapphires and emeralds are now rising in value as smart investors expand their portfolio and the emerging Asian markets lead the way into the gem stone world.
Kashmir Sapphires, 8.74 and 8.65 carat sold for slightly over $2 million, Christie’s Dec 2010
India and China have, of course, a long history associated with colored gemstones. They are a part of folk law and customs going back thousands of years, and are adjudged to bring good luck and good health. They are as much a status symbol in houses and at dinner parties as big diamonds are to western society.
These days, these countries have the financial clout to buy what they want. There has been a large increase in what would be seen as the “middle classes” in both India and China. Chinese dealers can pay a higher price for rare gems and still sell at a higher profit margin to the Chinese market. The present Yuan versus dollar scenario is also playing its part.
Meanwhile, in India, jewelry has always been classed as a solid investment and an alternative to money. The difference is that now a larger percentage of the population has the means to purchase it.
Rare gem stone prices are already going through the roof with dealers saying prices for high quality rubies have doubled in 2 years.
Even stones of average quality are up 20% this year according to some dealers. The price rises in precious stones have now filtered down to semi precious stones, especially gems such as spinel which have risen considerably.
It seems that history is indeed repeating itself. In years of old it was colored gem stones that ruled the waves, not diamonds
If colored gem stones were marketed as cleverly as diamonds were in the 1930′s then things would really take off.