An introduction to Garry Holloway’s Pink Diamonds Guide
More relevant now than ever, after Argyle diamond mine closed in November 2020. Download the guide for full information.
Low investment returns post the financial crisis and the rise in value of rare pink diamonds, plus the closure of the Argyle mine November 2020, attracted financial services brokers to promote pink diamonds as an investment. Some spend a lot on advertising i.e. their profit margins are big. Many claim to offer a reselling service too, but we hear lots of stories where there is never any success; naturally a company prefers to sell its own diamonds with out the need to declare their margins.
Buying and selling is problematic for private investors. The industry is opaque, avenues for reselling are poor.
The 4Cs of Fancy Coloured Diamonds
Coloured diamonds, or fancy coloured diamonds (FCDs), are valued differently from colourless diamonds, although the same four grading terms apply: Carat, Clarity, Colour and Cut.
Carat weight has a similar impact on pricing as colourless diamonds. However, top coloured pink diamonds above one carat (1.00ct) attract a premium, reflecting their rarity in larger sizes. Fancy yellow diamonds, which are often found in very large rough crystals, attract a smaller premium in larger sizes.
Clarity refers to the size, placement and visibility of inclusions. Consumers use terms like flaws, which implies the diamond can break. Sadly this is more likely to be true in the case of pink diamonds. Many people are unaware that diamonds can and do break. Argyle pink diamonds often have large surface reaching ‘feathers’ (a polite word for cracks) reducing durability. However, clarity has less impact on price with Fancy Coloured Diamonds than it does with colourless diamonds.
Argyle pink diamonds made such a big impact on the world of pink diamonds because they often have such striking colour. Bubble Gum, Fairy Floss or Baby Pink are terms used for the most desirable colours.
Colour grading: gia vs argyle
The Gemological Institute of America (GIA) is by far the largest global grading organisation and has its own system that it applies to all fancy coloured diamonds. As Argyle Diamonds are a major supplier of the worlds’ pink diamonds, they designed their own grading system as they felt the GIA system had shortcomings. People often ask, and expect, that cross referencing is possible. Sadly, it is not so, and no one believes this until they see Argyle / GIA mismatches with their own eyes, let alone the inconsistency within each organisations grading.
Colour grading is more complex than most assume with three (not two) variables to account for:
· Hue refers to the colours of the spectrum or rainbow. A diamond’s hue is its overall body colour e.g. Pink (which is by definition pale red), Purplish Pink, or in the opposite ‘direction’ orangey Pink;
· Tone is a diamond’s lightness or darkness;
· Saturation the intensity of colour, the most important variable.
A fourth factor is modifying secondary colours, such as a brownish or orangey.
Argyle used PC1, PC2 and PC3 to mean increasingly darker pinkish Brown or pinkish Champagne diamonds. The ‘ish’ refers to the modifying secondary colour. For example, in pinkish Brown or pinkish Champagne, the pink is the modifying colour, with Brown or Champagne the predominant colour; Brownish Pink is more attractive than pinkish Brown.
Before 2009 they used Pink Brown on a scale of 10 PB to 1 PB which they later changed to a marketers dream, of PR or Pink Rosé. But the most valuable colours, and what Argyle is most known for, are the purplish Pinks and pure Pinks. Occasionally an Argyle pink is graded as Purple Pink or Pink Purple, meaning the hue is half way between purple and pink. Pinkish Purple diamonds often come from Russia and are not as highly prized, which is strange as pure Purple is very rare and expensive!
Diamond colour graders at the GIA have a tough job of making grade calls for pinks because they are faced with a broader range of colour hues; along with more purplish hues, many African stones have an orangey modifier and Russian pinks tend to have too much purple. Graders evaluate each diamond for hue, tone and saturation in controlled lighting boxes
like those used to judge fabric colours. They are not very consistent, but they do the best they can with a sadly low tech approach. Both Argyle and GIA have crazy unpredictable variances in their grades which are evident when you see the diamonds side by side.
In an effort to answer the many questions we receive on matching the two systems, we have taken as much information as we can from diamonds that have been offered for sale with both
Argyle and GIA colour grades, and created two charts. One chart is for straight Pink and the other for purplish Pink. It is possible to do the same for Purple Pink, orangey Pink and brownish Pink, but these two charts will give you the general idea. As a rule, the darker side of the charts is less desirable than the left hand lighter side. Please do not try to use this as a grading system because it is not that accurate – it is simply to show the very rough correlation.
Generally speaking, each lab’s grade sets an underpinning benchmark price for a diamond irrespective of whether the grade given is ‘hard’ or ‘soft’. However, my advice is to buy a diamond that is in strong consumer demand for the cost, one that is desirable at a retail level. This would rule out the majority of Red diamonds because they are often too dark and lacking brilliance or ‘pretty pinkness’. Although many experts will disagree with me on this matter, my belief is that the more potential buyers, the better the chance to resell your diamond and liquidate your investment.
Download the Pink Diamonds Guide for more information.