Diamonds that rock

Rare colored diamond sales have been solid as a rock in recent months. In fact, the Wittelsbach blue diamond sold for $24.3 million US at Christie's in London on Dec. 11, 2008, setting a record price for any diamond or jewel sold at auction. The buyer was billionaire Laurence Graff.

Christie's Rahul Kadakia believes rare colored gems will remain at respectable price levels. "When it comes to colored diamonds, especially blues and pinks, those are rare in any market," he says.

Says Lisa Hubbard of Sotheby's, "Those appear to be holding their value, and they have not been subject to the ups and downs of the white diamond market."

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Sotheby's has also logged strong results in its recent colored diamond sales. An oval-shaped, vivid yellow diamond weighing 36.99 carats, internally flawless, sold at Sotheby's New York in December 2008 for $71,870 per carat.

These gems are still the most sought after by famous private purveyors like the William Goldberg Diamond Corp. in New York, which has produced some of the most extraordinary colored diamonds in history, including the 30-carat, $50 million Blue Lili and the 5.11-carat, $20 million Red Shield, the largest red diamond ever graded by the Gemological Institute of America.

"I've heard different talk totally, about mines shutting down, like the Argyle mine [in Australia]," says Barry Berg of the William Goldberg Diamond Corp., adding that he expects pink and blue diamonds to become ever scarcer. "It's very hard to find a blue today, rough or polished," he says. "Yellow is a little more available, but orange, I haven't seen in ages."

The Goldberg family business has seen prices for important stones remain strong. "We recently sold a 10-carat intense pink diamond for more than $8 million," notes Eve Goldberg. "We also sold a bracelet with 58 carats of fancy colored diamonds, all over one carat, for close to $3 million."

Diamond company seeks new clients in Russia, China

The company has moved from selling stones into jewelry and is pushing deeper into markets like Brazil, Russia, China and India in the hunt for new clients. Back in New York it's opening the William Goldberg Diamond Corp. boutique, designed by William Green. This new apartment showroom above Fifth Avenue boasts an outdoor terrace. In contrast to street-level retailers like Harry Winston, Cartier and De Beers, the Goldberg showroom offers privacy and calm to clients ready to spend millions of dollars, protecting them from the prying eyes of the public.

Clients have started to ask the Goldbergs whether they should consider buying diamonds as an investment and a shelter from plunging markets. Sotheby's Hubbard is not surprised. Diamonds have an international market, and they are seen as a way to preserve wealth, she says.

But with the economy as unstable as it is, it's tough for both auction houses and retailers to know how to price their wares. "We're putting together our spring sale, and it's not easy," notes Hubbard, "because values are in a state of flux."