A guide to understanding Fancy Color Diamonds

Natural gem diamonds are rare. The most common have slight amounts of yellow or brown. Colorless diamonds are the exception and they are what most people think of when talking about high quality and expensive diamonds. But even more rare and valuable than colorless diamonds are those that exhibit strong attractive colors. They are known as Fancy Color Diamonds and are found in an extensive range of color including yellow, pink, blue, and green. Some of the most famous diamonds in history, such as the Hope Diamond, are fancy colors.

Diamond is composed almost entirely of crystalized carbon. It is formed deep under the earth’s crust under enormous pressures and temperatures, and then brought to the surface by extremely isolated, violent volcanic events. During formation, many things can happen to a diamond, and most of them are bad! Most diamonds do not survive the treacherous journey to the surface intact.

But very occasionally a gem diamond is found that is of the quality that can be cut into a sparkling gem in a fancy color. The color can be a result of trace elements such as boron, hydrogen or nitrogen present at the time of formation, or it can be a result of distortions of the carbon crystal lattice. For instance, fancy blue diamonds owe their color to Boron atoms that are present in the crystal lattice. Pink diamonds on the other hand owe their color to structural deformities of the carbon lattice. A third factor responsible for some of the rarest fancy color diamonds is natural irradiation which is responsible for green diamonds.

The grading of natural color diamonds is a critical aspect in the valuation of these rare gems and is done by only a few top laboratories in the world. Foremost among them is the Gemological Institute of America (GIA). The methodology for grading fancy colors is substantially different from grading diamonds in the normal range (those in the colorless to light yellow and brown category designated as D-Z on the GIA color scale).

Fancy color diamonds are evaluated on the based of three color characteristics; Hue, Saturation and Tone.  In this way color is described as being three dimensional.

HUE is the specific color we see. It can be a single color or combination of colors, such as pink or purple pink. If the secondary color is not prominent the color grade would indicate so in a description such as ‘purplish pink’. A single color can potentially have multiple modifiers which are listed ahead of the primary color in the color description.

SATURATION is the strength or concentration of a particular color. Imagine a white cloth dipped into a bowl of pure red food coloring. The color is very intense and concentrated. Now imagine you dip another white cloth into a bowl of the same red food color but it is diluted with 2/3 water. The hue has not changed, but the saturation is now much lower and the color is not as vivid.

TONE is the degree of lightness to darkness that the color exhibits. Imagine again the bowl of food coloring. If you were to mix just a little black food coloring in with the red, the hue would still be red, the saturation would be the same, but it would be darker in tone.

A fancy color diamond of moderate tone will be assigned a grade according to its overall face up appearance. It will be designated as Fancy Light, Fancy, Fancy Intense or Fancy Vivid. Diamonds with darker tone can be graded Fancy Dark or Fancy Deep.

Certain colors almost never come in saturations that would be called vivid. Blue diamonds for instance commonly have a gray modifier and the best appearance for Blue is typically a darker tone. The Hope diamond is a Fancy Deep Grayish Blue.

The color will also be graded as “even” or “uneven” depending on how consistent the concentration of color appears. Uneven color can be a result of color zones within the diamond or the cutting of the diamond (or both).

Yellow and brown are the most common hues in diamond.  When they are present in faint, very light or light amounts they are graded in the lower portion of the normal D-Z grading scale.

Other hues such as blue, pink and green are designated simply as Faint Pink, Very Light Green or Light Blue, and are not assigned a color a letter in the lower normal range. But only when they get past Z in terms of strength of color are they considered a fancy color and referred to as ‘Fancy Light Blue” or Fancy Pink, etc.

There are some fanciful marketing terms that have emerged to describe some of the diamonds in the yellow and brown hues. “Canary” is a common term used in reference to bright yellow diamonds. The term “Cognac” is often used in reference to brown diamonds that sometimes have yellowish or orangish color similar to the French liqueur. “Champagne” is a term often used in reference for lighter tones in the yellow to brown range, and “Chocolate” is a reference to diamonds in the darker brown tones.

It is important to recognize that these are not gemological terms, but rather marketing terms. They are often used rather loosely in order to make a marginal fancy color sound more appealing.

The value of fancy colored diamonds is primarily determined by the color grade and size of the diamond. Clarity plays a part as well, but the presence of inclusions is less detrimental to overall value in a fancy color than it is in a diamond in the normal color range.

Similarly, cutting techniques and standards are much different for fancy colors. The goal of the cutter is to maximize the apparent color and at the same time maximize the carat weight derived from the rough crystal. For several reasons proportions, facet angles and even symmetry might be designed in creative ways to capture the color and preserve weight.

There are certain shapes and facet designs such as variations of the radiant and cushion that can accentuate color. Cutting for the brightest light return may in fact be detrimental to the depth of color, especially in lighter tone stones. Unique designs and faceting arrangements are also seen as a result of odd shapes of the rough crystal.

Diamonds have been enhanced by radiation and heat treatment for many years. Blue and green irradiated diamonds have been plentiful on the market for decades. Today there are even more sophisticated ways to create fancy color diamonds in the laboratory through High Temperature High Pressure treatment and by Chemical Vapor Deposition diamond synthesis. It is beyond the scope of this article to detail these products. Suffice it to say that the first goal of diamond grading at the lab is to detect indications of treatment or synthesis. A fancy color diamond should never be purchased without a report from a top tier laboratory. Otherwise, chances are good that coloration is not natural.

While grading rare color diamonds is challenging, determining value is even more difficult. This is especially true for largest and finest specimens. For diamonds in the normal range, there are well established pricing guides. And it is easy to shop multiple sellers of diamonds in the normal range. The market for fine fancy color is much more difficult to read for a couple of reasons.

First, the producers of fancy color rough are very selective in how they distribute the diamonds. They will be offered only to their top clients and those that have excellent financial strength and a reputation for selling extraordinary diamonds. Or, in the case of pink diamonds from the Argyle mine, the leading producer of pinks in the world, the diamonds are collected and offered once a year at an auction of industry professionals. This annual ‘tender’ is an exclusive, invitation-only event. While these dealers have a cost associated with the rough, their selling prices are primarily based upon the outcome of the cutting, the precise color call from the lab, and an intuition about the market opportunity.

The second related factor making valuation difficult is that the top stones are essentially one-of-a-kind. There is really no frame of reference in order to fix a price. The price is whatever someone is willing to pay for it. Many of these diamonds find their way to the large consumer auction houses like Sotheby’s and Christies. It is not unusual for exceptional pieces to bring far more than the predicted price. Looking at auction results is one of the only ways to get a feel for the market of really rare diamonds.

While it is true that fancy color diamonds have been appreciating at very high rates in recent times, investing in diamonds is complicated. Not all fancy color diamonds will experience high rates of appreciation or will even be liquid. Private individuals interested in collecting or investing in rare diamonds should be strongly advised to establish a working relationship with a knowledgeable, well-respected and well connected jeweler or diamond broker who can access these rare pieces and provide the necessary services and protections.