Dominating Wealth Concentration

Our first review of the most concentrated form of wealth was back in December 2009. We compared the value of one gram of gold, platinum, colorless diamonds, a work of art and fancy color diamonds. As a benchmark, we chose the day that the fancy color diamonds sold at the highest price, and looked for the highest price for a work of art sold that day, and for a colorless diamond sold that day. Then we found the price of gold and platinum that day. Dividing each of these rare commodities by value in a single gram, we developed a similar form of measurement. See below the graphs for both 2009, and 2013.

The graph shows how fancy color diamonds were leading the most concentrated form of wealth within the group.

 Concentration of Wealth in Diamonds - Benchmark: 11 December 2003

Concentration of Wealth in Diamonds - Benchmark: 11 December 2003 

 

Concentration of Wealth in Diamonds - Benchmark: 1 June 2005Concentration of Wealth in Diamonds - Benchmark: 1 June 2005

 

Concentration of Wealth in Diamonds - Benchmark: 8 October 2007

Concentration of Wealth in Diamonds - Benchmark: 8 October 2007

 

 Concentration of Wealth in Diamonds - Benchmark: 1 December 2009

Concentration of Wealth in Diamonds - Benchmark: 1 December 2009

 

 Concentration of Wealth in Diamonds - Benchmark: 5 October 2011

Concentration of Wealth in Diamonds - Benchmark: 5 October 2011 

 

Download our diamond investment ebook to learn more

 

4 short years later, when an artwork broke the world record for a price for any artwork ever sold at auction, a new graph was formed. The concentration of wealth per gram in artwork declined simply because of the size of the portrait that got sold. It was the 3 Studies of Lucian Freud by Francis Bacon.

 

Concentration of Wealth in Diamonds - Benchmark: 1 December 2009

Concentration of Wealth in Diamonds - Benchmark: 12 November 2013

 
On Monday, May 11 2015, a new record for artwork was broken again, when Pablo Picasso’s Les Femmes d'Alger (Version 'O') reached a new high, and in fact surpassed estimates. The artwork was sold in New York for $179,365,000. Naturally, I went to work and waited 2 more days for Christie’s to sell the 5.18 carat Fancy Vivid Pink for $10,843,413 or $2,093,323 per carat, the highest per carat for a diamond in 2015 (up to that date). The highest price paid for a colorless diamond up to that same date, in 2015 was $22,090,000 for a 100.20 carat, emerald cut D color IF clarity, type IIa diamond. The colorless diamond was sold in New York a few weeks earlier on April 21st. The Fancy Vivid Pink was sold in Geneva on May 13th.


The Fancy Vivid Pink was sold on May 13, therefore I used that day’s closing price for both gold and platinum, which were $1,215.10 and $1,147 per oz respectively, closing prices in NY.
Now, based on the various prices and measurements, I converted them all into prices per gram. Gold is 31.10g per oz, making gold worth $39.07 per gram. Platinum is $36.88 per gram. The colorless diamond is $1,102,295.40 per gram. The Fancy Vivid Pink diamond is $10,466,614 per gram. The artwork by Picasso was trickier, so we estimated the weight of the 44.875” x 57.625” to be approximately 300 grams. Based on the sale price of $179,365,000, the price per gram is $597,883.33. (see below chart for 2015).

 


Concentration of Wealth in Diamonds - Benchmark: 1 December 2009

Concentration of Wealth in Diamonds - Benchmark: 13 May 2015

 

It looks like Fancy Color Diamonds still rule the competition for the most concentrated form of wealth. It is probably safe to say, that it will remain so, for a very long time. Remember, after all – it is much easier and more discreet to buy and transfer ownership of a fancy color diamond than bars of gold, silver, platinum, or a giant painting!

Does this information surprise you? Tell us in the comments!

 

Related Diamond Articles

Colors Come Alive in Geneva Auctions
article image
Precious Gems Getting Significant Global Investment Attention
article image
My Tax Refund Came... Now What?
article image
How Pink and Blue Diamonds Beat Warren Buffett
Video Gallery