The love for coloured gemstones dates to centuries ago when royal families and connoisseurs from around the globe collected these natural treasures. Over the decades, the value of natural coloured gemstones continued to appreciate, with exceptional gems breaking record prices at auctions. According to a study by Knight Frank, coloured gems have outperformed other luxury products in terms of prices, including diamonds and the wider jewellery market. JNA talked to auction experts and major gemstone suppliers about growth prospects in the market.
This 36.68-carat Burmese spinel and diamond necklace sold for HK$3.7 million (around US$473,452) at Bonhams’ Hong Kong Jewels and Jadeite sale in May 2018
‘The Crimson Flame’ ring with a cushion-shaped Burmese ruby of 15.04 carats raised HK$141.8 million (around US$18.14 million) at a Christie’s auction in Hong Kong in December 2015, setting a world record
This platinum ring with a 34.40-carat hexagon-shaped emerald and diamonds by Harry Winston sold for US$996,500 at Sotheby’s New York in April 2017
This pair of alexandrite and diamond earrings fetched HK$2.86 million (around US$365,965) at a Sotheby’s sale in Hong Kong in April 2017
Coloured gemstones' dazzling performance over the years has caught the attention of buyers and investors worldwide. Commenting on Knight Frank's Luxury Investment Index Q1 2019, Andrew Shirley, head of luxury research at the global consultancy firm, said, “Coloured gemstones are outperforming the wider jewellery market with some significant sales taking place already in 2019.”
These included highly favoured gems at Bonhams auctions such as a 17.43-carat Kashmir sapphire ring, formerly owned by a European noble family, which fetched £723,063 (around US$901,334) and far exceeded estimates, at a London sale in April 2019; and a transformable necklace by Spanish jeweller Grassy that dates to around 1935 and features a 34.59-carat unheated Sri Lankan sapphire, which sold for £287,562 (around US$358,460).
Gemfields CEO Sean Gilbertson was also quoted in the report as saying, “The past decade has seen the world record prices for an emerald and ruby surpass that of a colourless diamond on a per carat basis. It surely can't be long before sapphires overtake diamonds, too.”
The 'Big Three'
In an interview with JNA, Gilbertson expressed optimism about prospects in the coloured gemstone market.
“The biggest cutting and trading markets for rubies are Thailand, Sri Lanka and India, while the largest consumer markets are China, the US and India,” he noted. “Gemfields is seeing a surge in demand for Mozambique rubies from Asian markets – particularly China, where there is a long history with gemstones, especially jade, and a traditional fondness for the ruby's vibrant red colour. Raising awareness and demand for emeralds in this market is a key focus for the future.”
Paul Redmayne, former head of Sales - Jewellery at Bonhams (Hong Kong) Ltd, meanwhile said encouraging auction results prove that despite a challenging global economy, demand for rare and high-quality coloured gemstones remains strong.
Rubies, sapphires and emeralds have led the coloured gemstone market for decades, he added, noting that unheated Burmese pigeon's blood rubies, unheated sapphires from Kashmir and Sri Lanka, as well as no-oil Colombian emeralds are “branded” goods sought after by gemstone lovers.
“These three have become an asset class to a great number of people – some appreciate these gems for their aesthetic value, but others buy these for investment since they have seen how the prices have gone up,” he commented.
These gems have also become so rare that it is now impossible to find two gemstones with the exact same exceptional quality such as a 15-carat stone, remarked Vickie Shek, chairman of Jewellery Asia at Christie's Hong Kong. Gems above 5 carats are also rare these days. Owing to their rarity and continued popularity, demand for and prices of top-range gems will remain on a steady rise, noted Shek.
According to Yvonne Chu, acting head of the Jewellery Department at Sotheby's Hong Kong, there is also increasing demand for Mozambique rubies as buyers become more aware of the stone. The gems must be of high quality to attract investors' attention, she added.
The vibrant colour and unique sparkle of spinel have aroused the interest of many gem lovers in recent years, disclosed Redmayne. He also noted an increase in the number of enquiries on the stone, whose history is in fact even longer than that of rubies. According to Chu, since the discovery of a large deposit of spinel in the Mahenge mine in Tanzania, the popularity of the stone continued to grow.
Other highly sought-after gemstones include Paraiba tourmalines, padparadscha sapphires, alexandrites, fancy sapphires as well as jadeites. For gem lovers who already have a wide collection of exquisite gemstones, items that are truly unique would be their next target. “Gemstones such as jelly opals, which are generally less expensive but have a unique personality would be a good addition to the treasure troves of sophisticated collectors,” added Shek.
The differences in colour, transparency, size, shape and even in the form and amount of inclusions in each specimen shape up the personality of each coloured gemstone, and make it desirable among collectors. In today's sophisticated precious gem market, uniformity can no longer satisfy buyers, explained Chu. Buyers nowadays want one-of-a-kind goods.
The value of gemstones from a less popular origin could be augmented by contemporary designs or a reputable designer or brand. “For instance, the price of a Mozambique ruby or a Brazilian emerald could rise significantly if the design is cutting-edge regardless of the quality of the stone, especially for jewellery designs with a story and unique concept,” she continued.
In recent years, auction houses have increasingly been working with private labels or reputable designers at auctions. This trend of collaboration is not merely a marketing initiative but also illustrates how bespoke designs can further add value to coloured gemstones.
Redmayne also sees the positive impact that fashion houses and world-renowned labels have on the development of the coloured gemstone market. When a famous fashion house comes out with a collection focusing on a certain colour, jewellery brands would create collections following this prevailing trend. To catch up with fast-moving trends, jewellers now shorten their product cycles and launch new items quicker to answer customers' evolving needs.
Thanks to the internet, consumers of all ages are more discerning. “Many buyers know exactly what and how they want to buy and at what price range,” noted Redmayne. Customers are very knowledgeable and targeted at their purchase, some even name the laboratory from which they want the certificates to be issued, he added.
“We see many younger customers in their 30s, 40s, even late 20s who are quite comfortable with investing in coloured gemstones online,” Redmayne continued.
Christie's pioneered the online platform for jewellery auction a few years ago and Shek is glad that such an initiative opened doors to a whole new coloured gemstone market. “We've broadened our clientele to a much wider age group and regions, and we can try new items that are usually not popular at traditional seasonal sales. Demand from online buyers gave us a chance to look for unconventional items that could catch the attention of buyers who are constantly looking for non-traditional gem materials,” she explained.
Recent global uncertainties have undoubtedly had an adverse impact on the business environment, which in turn, affected market demand for luxury products.
As such, industry players remain cautiously optimistic about the future of the gemstone market. Natural resources are limited while demand for and prices of top-quality gems are only going to get higher. The same is true with jewellery, especially vintage and antique products, which are gaining steam in the market, according to Redmayne.
Shek mentioned that some clients had expressed concerns over the recent political situation in Hong Kong and considered changing their travel plans. She further commented, “Summer has always been a slow time in the jewellery market. We are now focusing on preparing for upcoming sales, and looking forward to showcasing collections of exclusive gems to our buyers.”
Chu is also busy compiling the fall collection with her global team of jewellery experts. “We are excited about several lots of exceptional items, which we are going to reveal this fall. Among the top lots is a coloured gemstone piece,” she said.
The rising importance of Chinese buyers has injected immense energy into coloured gemstone markets. Like many gemstone dealers, Gilbertson is excited to see continued growth in China. “The coloured gemstone market in China is huge. The major obstacle are import costs, which include a 10 percent duty and 13 percent VAT. The tax for gemstones has been reduced from 36 percent to 23 percent since March 2019, but further reductions would greatly assist the coloured gemstone market,” he noted.
Gilbertson added that consumer-focused marketing activities are essential to further boosting the gemstone sector. A steady supply of responsibly mined gem materials allows designers and jewellery houses to create collections that appeal to consumers and discerning investors.
The growing understanding of a gemstone's origin, responsible mining and corporate social responsibilities are crucial not only to key players in the industry now but also to consumers. Gilbertson stressed that transparency, legitimacy and integrity are key values at Gemfields. “The industry is rightly undergoing heightened supply chain scrutiny with consumers increasingly asking for certificates of origin, requiring much improved knowledge and documentation at the retail level,” he added.