No one ever expects a diamond to end up in a museum—though many have. So perhaps that’s why we don’t see the same outrage about diamond prices that we’re seeing around the prices for works of art. But Sonia Kolesnikov-Jessop shows from her conversations with Christie’s Rahul Kadakia in the International New York Times that nearly identical trading patterns are emerging:

Large diamonds have proven to provide good returns on investment in recent years. A 50.01-carat rectangular cut diamond that was sold at Christie’s New York in 2005 for $4.2 million came back to market last year and sold for $8.4 million. Both times, the diamond was purchased by the jeweler Laurence Graff, who had resold it in the interim.

Such large stones are purchased by individuals and jewelry firms with an “investment element always present,” Mr. Kadakia said, adding that the fact that Mr. Graff was willing to pay twice as much the second time around was “a very clear indication of the direction for the rare diamond market.”

Gem stones have no more economic value than art works do. They have the added benefit of being even more like gold than art works in that there is an atavistic sense that they are equivalent to money and have been used instead of money for as long as human beings can “remember.” Plus, the stones are becoming as finite as an artist’s output:

The Rio Tinto’s Argyle mine, which produces more than 90 percent of the world’s natural pink diamonds, is expected to be closed in 2020.

On October 14, Argyle held its annual sale to invited members of the trade: a single bid per stone for each of the 64 lots on offer. Two price records were broken: the Argyle Phoenix, a 1.56-carat fancy red diamond, fetched the highest price per carat for a diamond ever produced from the Argyle mine, selling for more than $2 million.

“In the colored diamond world $1 million per carat is now normal, which in itself is a headline,” Mr. Kadakia said.

 A Rising Appetite to Invest in Colored Diamonds (NYTimes)