Pink diamond record price shows market strength

GENEVA Tue Nov 16, 2010 6:48pm EST

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GENEVA (Reuters) - A rare pink diamond fetched 45.44 million Swiss francs ($45.75 million) on Tuesday, virtually doubling the previous record to become the most expensive stone ever sold at auction and underline the strength of the international jewelry market.

The rectangular step-cut pink diamond, which weighs 24.78 carats and is about the size of a pinball, was the star lot among nearly 500 on the block at Sotheby's semi-annual jewelry sales in Geneva.

Top diamond dealer Laurence Graff, bidding by telephone, was the buyer of the diamond which is mounted in a platinum ring, the auction house said in a statement.

"It is the most fabulous diamond I've seen in the history of my career and I'm delighted to have bought it," said Graff, a Briton who began his career as a teenager in London's East End and now resides in the Swiss resort of Gstaad.

"It is a world record price for a jewel at auction," said David Bennett, chairman of Sotheby's jewelry department in Europe and the Middle East, as he brought down the hammer to applause in the packed sales room.

"It's like pink champagne," he told Reuters before the sale.

The stone, purchased from American jeweller Harry Winston 60 years ago by the anonymous owner who consigned it for auction in the Swiss city, had a pre-sale estimate of $27-38 million.

Previously, the world's most expensive jewel sold at auction was the historic "Wittelsbach" blue diamond, a 17th century stone of 35.56 carats that fetched $24.3 million in December 2008 at rival Christie's.

That was also purchased by Graff of Graff Diamonds, who later had it repolished, making it smaller at 31.06 carats, and renaming it the Wittelsbach-Graff Diamond.

VERY STRONG MARKET

He is the controlling shareholder in the South African Diamond Corporation, a diamond wholesaler and manufacturer based in Johannesburg and a major shareholder in Gem Diamonds Ltd, according to his website. Gem Diamonds earlier this month said it had found a 185-carat rough white diamond at its Letseng mine in Lesotho.

"Laurence Graff is a great connoisseur of gem stones. He certainly now owns two of the greatest stones in the world," Bennett told reporters on Tuesday night.

"There were four active bidders for the diamond, which at that level is quite extraordinary," he added. "It tells you a lot about the health of the market."

Bennett, noting that pure diamonds and vintage pieces by French jeweller Van Cleef & Arpels commanded high prices, said: "The market for fine gemstones and fine jewelry is as good as it has ever been, it is very, very strong."

A pair of fancy blue diamond and diamond pendant ear clips by French jeweller Alexandre Reza soared to $1.79 million, tripling the low end of its pre-sale estimate. It went to a New York-based dealer, according to the auction house.

The sale netted $105.05 million, a world record for a jewelry sale, exceeding the previous record of $68.5 million also set by Sotheby's in Geneva in 1993, its statement said.

In all, 397 of the 487 lots on offer found new owners, for a sell through rate of nearly 82 percent by lot.

Christie's holds its Geneva jewelry sale on Wednesday.

Eric Valdieu, a former Christie's jewel expert in Geneva now of Valdieu Fine Arts, told Reuters as he left the Sotheby's sale: "The prices were stronger than in 2007-2008, that's why everyone has a smile on his face."

"The reason is the bad performance of the stock market in the last year or two. Nobody knows what they are buying with stocks, but here they are buying something solid and tangible. The top quality jewels are even more expensive than they should be," the Frenchman added.

(Editing by Tim Pearce)

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