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 commonplace, unimaginative and somewhat passé.
Most people in the industry are aware that the whole "diamonds are a girl's best friend" phrase was just part of a sophisticated marketing exercise by De Beers in the 1930s. 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 shrewder buyer is looking at other options and discovering a wide variety of beautiful 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. Fine, large unheated Burmese rubies sell, on average, for about $160,000 - $420,000 per carat.
These gems are hardly ever 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. Four thousand of the traders were from overseas. Earlier trade shows in March and October made 400 and 700 million Euros respectively. This year's 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 is continuing to grow. The Chinese and Indian markets are the main buyers and are driving the demand for gemstones.
Colored gemstones have always been "in vogue" amongst those with discerning taste. Kate Middleton's 12ct sapphire engagement ring reinforced this fact. Received from Prince William who had inherited it from Princess Diana, 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 emerald engagement 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-1950s.
The trend is being seen much more now in the world of celebrities; Penelope Cruz recently received a huge blue sapphire as her engagement ring. Jessica Simpson was given a 4 carat Burmese ruby and diamond ring.
Good quality colored gemstones are hard to find and with supplies dwindling, they will only 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. However, this 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 valuable 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 was at a Christie's auction 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 from inclusions.
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 gemstone world.
India and China have a long history associated with colored gemstones. They are a part of customs and folklore going back thousands of years, and are believed 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.
Nowadays, these Asian countries have the financial clout to buy what they want. The middle classes of India and China have grown, meaning that there are now a great deal of wealthy Chinese and Indian gemstone buyers. Chinese dealers can pay high prices for rare gems and still sell at a higher profit margin to the Chinese market. The present yuan against the 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 gemstone prices are already going through the roof. According to dealers, prices for high quality rubies have doubled in two years. Even stones of average quality are up 20% this year according to some dealers. The price increases in precious gems have now filtered down to semi-precious stones, especially gems such as spinel, which has risen in price considerably.
It seems that history is indeed repeating itself. In bygone times, colored gemstones were more highly prized than diamonds. If colored gemstones were marketed as cleverly as diamonds were in the 1930s then things would really take off.
Perhaps, those in the know like it just the way it is.
We hope you've found this article interesting. Why not email us with your thoughts or any questions? We always like to hear from our customers.
- 初刊: 10月-26-2011
- 最終アップデート: 7月-08-2019
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