Feeling ‘Blue’ About Colored Diamond Auctions

The recent Sotheby’s magnificent jewels auction in New York made headlines, but unusually because of what did not sell rather than what did – namely, a 9.54-carat blue diamond ring once belonging to child star, Shirley Temple.

The ring was supposed to be the highlight of the sale and pre-auction estimates put a reserve price of $25 million to $35 million. The highest bid on the night was “only” $22 million, meaning that it could not be sold, and left many scratching their heads, and an apparently audible gasp in the auction room, as to why this was the case.

Only two weeks prior to this sale, Sotheby’s in Hong Kong sold an internally flawless 10.1-carat De Beers Millennium Jewel 4 Fancy Vivid oval blue diamond for HK$ 248.28 million ($31.8 million). Apart from its qualities as a piece of jewelry, this stone was also made infamous in the year 2000, after thieves attempted to steal it from its display in London’s Millennium Dome. Auctioneers were sure that the Shirley Temple stone would be a hit, considering its owner’s past popularity – and yet, it did not sell.

The New York auction is sandwiched between the Hong Kong sale of De Beers Jewel 4 and the upcoming sale of the “Oppenheimer Blue” – the largest-ever blue diamond to come to auction at 14.62 carats – and offered by rival auction house Christie’s. That stone, which like Jewel 4 is internally flawless (something that the Shirley Temple diamond was not), is expected to fetch around $38 million to $45 million. This estimate would take it very close to the world record paid for the most expensive diamond purchased at auction – the “Blue Moon of Josephine,” a 12.03-carat cushion-shaped Fancy Internally Flawless Vivid blue diamond that set a world auction record of $48.4 million in November.

So should we be feeling blue about the non-sale of this blue diamond? The recent market for colored diamonds has been buoyant, not only the various blue diamonds that have been sold at auction over the last few months, but also the sale of the 16.08-carat vivid pink cushion-shaped diamond – “Sweet Josephine” – for $28.5 million.

77Diamonds.com managing director Tobias Kormind said, “It seemed this was a unique moment in time where important diamonds would change hands, perhaps not to be seen again for decades. This begs the questions, can the market really handle such an avalanche of stones at the same time, was the record set by the Blue Moon a misleading signal of pent up demand and has buyer fatigue set in? Or was this a pause, before the final battle for what is the jewel in the crown – the Oppenheimer Blue? Perhaps Shirley Temple was not a compelling enough draw and the fact that it was deep blue (not vivid) may also have played a role. As for the Oppenheimer Blue at Christie’s Geneva on May 18, only time will tell if another record will be broken or if the Shirley Temple was a massive misjudgment of timing."