There are three types of hammers associated with diamonds:
The first hammer is that wielded by the miner who extracts the stone from deep below the earth’s surface. Used in conjunction with a pick and other tools, the miner’s hammer is a fairly blunt instrument designed for hard work and hard men. The majority of the world’s diamonds are unearthed in South Africa. But they are also mined in India, Australia, Canada and other locations.
The second type of hammer is a much more delicate implement, utilised by diamond cutters and jewellers to morph a diamond in the rough into a stunningly shaped sparkling specimen and hence exquisite piece of jewellery.
The third hammer a diamond may come across in its surface journey is that of the auctioneer – this hammer more specifically known as a gavel…
DIAMONDS AT AUCTION
Last week the Australian auction house Leonard Joel sold the most expensive diamond ever to come on the market in this country. The auction was held at their Sydney rooms on April 20. Lot 46 was a 25.02 carat platinum and diamond ring featuring a square emerald-cut diamond, which fetched a record smashing $1,125,000 AUD – sold to an anonymous bidder.
The auctioneers released the following statement: “When the hammer went down, the previous record for the most expensive diamond sold at auction in Australia – set at Leonard Joel’s Important Jewels auction last August when a 17.34 carat diamond ring sold for $575,000 IPB (Including Buyers Premium) – was broken. The seller of the ‘Leonard Joel Diamond’ is over the moon, and Hamish Sharma, Leonard Joel’s Head of Important Jewels, is delighted to have broken his own record.”
The auction delivered $4,275,000 IBP in total, making it the highest grossing single auction of jewellery in Australian history, with competitive bidding from Australia and internationally, though most of the lots were picked up by domestic buyers.
There were other notable highlights including lot 24, a rare pair of platinum and diamond earrings, also with square emerald-cut diamonds, weighing 10.03 and 10.00 carats respectively, which brought $650,000 IBP; lot 49, a splendid platinum and 18ct gold fancy intense yellow diamond and diamond ring which earned $287,500 IBP and lot 73, a fabulous platinum and diamond ring, with brilliant-cut diamond weighing 10.07 carats which was sold for $275,000 IBP.
The record-breaking sale was picked up by media outlets, channel 9 reporting that “It is understood the spectacular stone was cut from a 47.961 carat rough, ethically mined in the Canadian tundra, and listed for sale by a local mystery investor.”
Their report went on to note how the 25 carat ‘Leonard Joel Diamond’ well and truly eclipsed the diamond engagement rings belonging to celebrities, Kim Kardashian and Jennifer Lopez (both 15 carats) and Meaghan Markle (6 carats).
In the media release, Leonard Joel’s Hamish Sharma, who has been in the jewellery industry for 40 years, remarked that the diamond is the most amazing he has ever laid eyes on. Mr Sharma said, “You’ve got the size of the diamond – 25 carats is significantly big and you’ve got the quality … it’s a flawless quality.” He went on to say that, “It’s the rarity and of course the beauty of the stone. When you look into it, it sort of mesmerizes. When people put it on, they haven’t been able to take it off. It’s like a holy grail… not quite… but where do you find another?”
BUYING AND SELLING BY AUCTION – THE PROS AND CONS
There will not be too many of us in a position to spend the above mentioned figures when purchasing a diamond ring, be it privately, at a retail store or at auction. But what exactly are the implications when buying or selling diamonds and jewellery in general at auction?
Purchasing diamond rings and other precious stones and jewellery at auction can be exciting, because it’s potentially like going to the races, having a flutter on the horses and having a win. Winning at an auction, as a bidder, is of course snaring a bargain. The items sold at auction (lots) discussed above are obviously not bargains. But it is certainly possible and does occur when lots are, for whatever reason, sold at or below their reserves and obtained relatively cheaply.
However, such bargains might get you ‘more than you bargained for’ – or indeed less than you bargained for. Buying at auction is very much caveat emptor, or buyer beware. The auction process can be hard and fast and a ‘lot’ which seems ostensibly to be ‘bought for a song’ may prove to be more of a lament, if it turns out to be not quite what you expected, when you get it home.
Bidders are given time to view and inspect all lots prior to the auction of course. In addition, you may request a ‘condition report’ from the auction house, stating all known information pertaining to each item. But the condition reports may not be entirely comprehensive, or may sometimes contain errors in judgment. Although all reputable auction rooms will do their utmost to provide the fullest and most accurate information, at the end of the day it’s down to each bidder, who buys at their own risk.
Furthermore, the atmosphere on the night can be overwhelming and emotionally unsettling – causing bidders to pay well in excess of the amounts they had initially intended to – and perhaps buying items which are not entirely what they had expected, as it turns out.
Registering and bidding at auctions is a contractual arrangement, and if the final bid is with you, prompt payment in full is expected, and reversing this is difficult and can even result in legal action.
The ‘estimates’ against each lot in an auction sale are generally based upon figures which similar, comparable pieces have recently sold for. This can be a rather arbitrary way of suggesting how much an item should be sold for. Should you bid beyond the high end of the estimate? Who’s to say. So, it can be a confusing and risky proposition.
In comparison, buying privately from a jeweller affords you as much time as you need to inspect the diamond or other jewellery item; you can talk privately with your jeweller for as long as you need to about every aspect of the piece you are considering purchasing. Also, you can form a lasting relationship with your jeweller, based upon trust. This may involve additional advice with regards to insuring the diamond ring, maintaining it and of course offering back up services such as repair or alterations, should they be required or desired. The prices set by a jeweller are based upon a much more structured set of parameters than an auctioneer’s estimate. And all good jewellers will 100% stand by the products they sell.
Selling jewellery at auction can be the quickest and easiest means of moving it. If your property is eagerly bid for by at least two parties, the price may go high – as in the diamond rings mentioned earlier. However, there can be pitfalls. The main one being – your item(s) may fail to sell on the night of the auction. When this happens, the items can have a sense of being ‘tainted’ and be difficult to market and sell subsequently.
If your property does sell, the auction house will take a sizeable commission; they also charge commission to the buyers, known as ‘buyers premium’.
Selling your diamond ring through a dealership can be a much more straightforward process, where a price is agreed upon and unlike auctions, there’s no attendant hype or pressure on the night.
So, although diamond and jewellery auctions can be exciting, even glamorous affairs, they are also inherently risky for both buyers and sellers. For those seeking a careful and considered process with regard to such important properties as engagement and wedding rings and other jewellery, an intimate and mindful transaction with your jeweller is advisable.
By Nick Resch